LWSN: It’s Time (to Reinvest)
July 11, 2008
Posted by on
Yesterday, Lawson released their fourth-quarter and fiscal year 2008. To just read Lawson’s press release (http://www.lawson.com/wcw.nsf/pub/new_3CABF3), you can see that (according to Lawson, at least) everything’s rosy:
“Company posts more than $100 million increase in annual revenues”.
But, you then comes the Wall Street spin, which is, frankly, amusing:
I’ve highlighted some of these, just to give you a flavor for how the results are interpreted.
Now, I’m not a financial analyst, but here’s my take:
- Revenue is up (that’s good)
- Profit, while not a loss, is not as high–percentage-wise–as it used to be (that’s still good)
- Lawson is going to buy back $200MM of their own stock (that’s good)
That’s it, folks.
Remember: Wall Street loves volatility. They make their money on the shorts/longs, and really don’t care about the long-term viability of the company. One of the things Harry Debes said when he came on-board was that he would not manage the company to please, nor in reaction to, Wall Street.
I agree with Lawson’s decision to the stock buyback. I never really understood stock repurchase plans until someone explained it to me like this:
“When times are bad and you can’t make a decent return on any investment, the best investment is yourself. If you can’t re-invest in yourself (by buying back your own stock), what are you telling the rest of the world?”
So, the bottom-line is: revenue is up, still profitable, and re-investing. Sounds like a solid plan to me.