Home » Black Swans » Strange Data Points for Stanley Black & Decker. Where are the hard assets. Dividend is Suspect. $SWK

Strange Data Points for Stanley Black & Decker. Where are the hard assets. Dividend is Suspect. $SWK

Image representing Stanley Black & Decker as d...

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Stanley Black & Decker (NYSE:SWK) announced Q2 results and has some strange data points investors should be aware of. The most telling is their market cap of about $10.7 Billion. Balance sheet intangibles come in at $10.4 Billion. This is a manufacturing concern so where are the hard assets?

While we are on the point two-thirds of cash flow were used to repurchase shares in the open market. Cash position is down, short-term borrowings are up all of which point to liquidity concerns which seem to be growing.

So what does the board do. Buy shareholders and increase the dividend. Stanley Black & Decker’s President and CEO, John F. Lundgren pontificated that they are sensitive to shareholder concerns about returning cash.

Good point returning cash. Where is the cash going to come from. Dividend coverage ratio is suspect.

George Gutowski writes from a caveat emptor perspective.

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