Whirlpool WHR running thread

There are lot of moving parts, issues

  • European sale is yet to close and it is not clear the FCF assumption on this transaction will be realized
  • Sales is not growing
  • Free Cash Flow is shrinking ($500 M ) for 2023 (reduced from $800 M)
  • Dividend required $390 M
  • Capex requires $600 M
  • significant debt ($7 B)
  • Lot of debt coming due, meaning the debt cannot be retired using cash flow, and refinancing means refinancing 3.x% debt with 5.x%
  • Interest expense is set to go up, further reducing cash flow
  • Possible recession means sales will further slow down, putting pressure on margins, cash flow

Okay, that’s a laundry list of negative things, then why are we looking at this name?

The stock price has significantly declined. The dividend yield is 6.4%, a strong brand.

For now, I am just watching this company, may sell a put to keep an eye. If the stocks gets to somewhere around $75, I will re-evaluate.

And, Trump’s protectionist tariff on Korean washers, enacted specifically to protect Whirlpool, expired in Feb 2023, so Whirlpool lost that tailwind too.

A couple years ago, when that tariff was in effect, the pump motor quit on my Samsung washer. I mosied over to Lowe’s to price a new washer. They were out of Samsungs, and a new Whirlpool/Maytag something was eye-poppingly expensive. Turned out the duff motor was easily accessible, and a replacement was only $35 on Amazon, so now I add “washing machine mechanic” to my resume.


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ha now I understand the meaning of “every problem is an opportunity in disguise” Congratulations. :grin:

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