And one final point to help clear up further misunderstandings of the thrust of the post: if a company as ‘savvy’ as Intel has a difficult time with its re-investment/acquisitions as evidenced by its 3 year share price performance (down 27%), what makes one think that Patriot will be able to do better? How easy is it to just go out and find that perfect fit for an M&A deal, that will create eps that are accretive? Obviously, not that easy. In fact, how risky is it to empty the till and perhaps go into debt in order to buy an entity that we ‘hope/believe’ will perform to such a level that the earnings and cash flow (not rev’s) will exceed what would otherwise be? Examine those risks for a moment, noting how the larger and more ‘sophisticated’ Intels of the world have prevailed.
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I am not suggesting the management and the board do not continue to search for good investments that could be rewarding. I am saying they are not easy to find and they do not come without degrees of risk inherent therein. We are sitting on a cash cow right now – and those are hard to come by.
