Post by
retiredcf on Aug 26, 2024 6:50am
Hang In There
I've owned these for quite a while (KXS 5 yrs; WELL 4 yrs; CTS 3 yrs) but they haven't performed as I'd hoped (KXS +17%; WELL +4%; CTS -1%). Note that I've added to each since the initial purchase. I understand 'wait time' and that the market sometimes takes a while to respond to fundamentals, but I feel I've given these all a fair chance and yet I continue to believe - and to hold! Can you offer me any assurances to either continue holding or selling any of the three stocks?
KXS has been a disappointment but we do believe its time will come. It has too much cash and we wish it would spend some. It does not help recent buyers, but we would note it is at least up more than 10X from its 2014 IPO. Close to 50% EPS growth is predicted for 2025 and we think it is worth holding to see if that can be delivered.
WELL is executing well, but not getting the valuation we think it deserves. It may do an asset sale to provide more funds for M&A deals. It is much smaller, but we do believe in management here.
CTS struggled with two things in the past: debt and earnings growth. But we think both have been largely resolved. Since 2022 debt is lower by more than $100M, and EPS of 31c in 2022 should rise to 62c next year. Based on all metrics it is very cheap, and with lower debt and better growth its valuation multiple certainly has the potential to increase. (5iResearch)