The Soft Underbelly of SPBLots of discussion here about the prospects of SPB. Frankly, IMO and based on decades of experience working on The Street, my best advice is to stay away from this company and put your money elsewhere.
Why you ask?
There are two main reasons and the second one is the most important going forward.
1....SPB's acquisition strategy has been to buy small Mom and Pop propane businesses and pay market value for them while at the same time these acquistions offered very little potential for synergies which is what most compamies look for when making acquistions. So it is not surprising that the history of acquistions has done very little in terms EPS growth. Low EPS growth = big money looking to invest elsewhere.
2...SPB overpaid for Cetaurus and trumpeted it as a saviour through growth in upstream energy. So what happens? In July they announce that Cetaurus is going to redefine itself into some new business that its managment knows nothing about. This a double whammy (maybe a triple) - overpaying for something and then saying that the business they bought isn't working and they are going to use its assets to get into a new business with all the risks that that implies.
No wonder the SP is tanking and it will continue unless they pull off a miracle and the transformation they talk about in their July PR pays off quickly and in a huge way. the prospects of that happening are frsankly very remote.