News flash! I just saw where WTW suspended their dividend and they are trading down 10% this evening. It seems to me that someone mentioned on his blog that WTW had about the worst balance sheet he had seen and when you looked at tangible book value, they were so far below 0 that it would take nine or ten years to get back to break even.
As long as you are growing revenues, you can overlook things like negative equity. But when the tide starts to go out, it all becomes crystal clear who is overweight in their bikini (ok, that is a stretch).
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3 comments:
Marshall, WTW has been on my MFI list for the last couple of months at the >$500m level. How does that happen? Fortunately I had not taken a position in it. Karl N
Karl - MFI really has limited focus on the balance sheet. I think that is ok to a certain extent. WTW was on the MFI screen because people have been switching to use apps on their smartphones instead of using WTW, as MFI is backwards looking it is explicitly assuming that that trend would reverse itself. But it did not.
Thanks! K
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