From Leyland Private Wealth, Is Fleetwood a good candidate for a turnaround

From Leyland Private Wealth, Is Fleetwood a good candidate for a turnaround? Over a 9 year period between 2004-2012, Fleetwood had strong compound earnings per share growth of 8.8% p.a. Over the same period ROE in most years was over 20 suggesting the business possesses strong fundamentals, strong financial discipline and a competitive advantage allowing it to earn a reasonable return on capital. Due to the mining slowdown, demand for mining accommodation has collapsed. Consensus analysts' earnings estimates are for FWD to earn 17cps in 2014, followed by a strong rebound in 2015 to 31cps. With FWD's stock down over 80% from its peak, an NTA of $2.42 and the potential for a strong rebound in growth in 2015, long term investors who can withstand short term price fluctuations should consider this well-run quality company whose earnings are likely to be materially higher in the years to come. (VIEW LINK)

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