Mastec

People asked me why I got out of Mastec. Here’s a nice write-up on MF RB.

http://newsletters.fool.com/1069/coverage/updates/2014/10/31….

They point out that this will be the 4th quarter in a row of flat or down earnings (even adjusted earnings). As you would expect, they have the eternal Motley Fool optimism when talking about a stock that they have already recommended - and for all I know they may be right, and next year may be better, but I have better places for my money.

Saul

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Hey Saul, I always struggle with this. Every business will have a time where they need to retool, their EPS will invariably go down, revenue might flatten out but they are positioning themselves for future growth. How do we tell that situation from the companies that are just trying to hit their quarterly numbers at the cost of their long term business. I don’t know the answer. MTZ has certainly grown their business recently http://ycharts.com/companies/MTZ/revenues_ttm , http://ycharts.com/companies/MTZ/eps_ttm , earning look cyclical. We just went through huge investments as a nation in oil and gas, communication network upgrades so maybe we have a few lean years ahead. Again I don’t know the answer. I’m 50/50 on this one.

If all that is too boring for everyone…then watch this video below

http://videosift.com/video/This-Aerobic-Video-Wins-Everythin…

-e

1 Like

I always struggle with this. Every business will have a time where they need to retool, their EPS will invariably go down, revenue might flatten out but they are positioning themselves for future growth. How do we tell that situation from the companies that are just trying to hit their quarterly numbers at the cost of their long term business. I don’t know the answer.

Hi Ethan, Those are great questions. I guess that with a company that has something really special, I’d give them more slack. With MTZ, however, I just didn’t see the special sauce. They just seem like a good, well-run company, but basically a commodity company that hasn’t anything special to offer, and had earnings going nowhere for three quarters, as your graphs show so clearly. Just a question of better places to put my money. (For example, look at CELG, which is investing lots for the future, but still keeps growing earnings every quarter, just off the top of my hat).

Saul