I went through their Annual report, but just don't see the capacity for paying back debt if the operations don't increase materially. All their operating cash flow went to Capex. Why they still pay dividends and do share repurchases is beyond me.
The family has been operating equipment dealerships since 1984. They understand the long term stability of the business, and believe that there will be free cash flow. That being said, they might be underestimating the risks of rising interest rates for the refinancing in 2029. If it were me, I would focus more on debt retirement. But at least for the next few years under Trump, business should be booming.
I went through their Annual report, but just don't see the capacity for paying back debt if the operations don't increase materially. All their operating cash flow went to Capex. Why they still pay dividends and do share repurchases is beyond me.
The family has been operating equipment dealerships since 1984. They understand the long term stability of the business, and believe that there will be free cash flow. That being said, they might be underestimating the risks of rising interest rates for the refinancing in 2029. If it were me, I would focus more on debt retirement. But at least for the next few years under Trump, business should be booming.
Agree there is huge operating leverege, but will wait to see if it goes in the right direction.