WBC spinoff from ASD?

**grapes** Wed Jul 25, 2007 7:20 pm

WBC spinoff from ASD?
Blast or other gurus,

Any idea about this play? This is interesting in the sense

1) ASD is a S&P 500 company, but WBC is not added into any S&P indexes per most recent S&P annoucement. (WBC has around 3B market cap, probably should be in S&P 600 if S&P add it.)

2) ASD is in Warren Buffet portofolio. My initial digging showed at least in 2004, Buffet has this stock.

WBC is basically manufactureing truck's ABS brakes. Main business in Europe. I have a very brief look at the financial statements of pass 15 years of ASD (Fortunately, ASD has very detailed breakdown of WBC business). It looked like the WBC business is very stable in the beginning (1994 to 2000) and grows from 2000 at a rate of around 10%. However, I don't have a good idea of the cycle of truck business even though it looked like WBC's business is not very cyclic from the financial statement.

Another thing is that there maybe some recapturing of the balance sheet and divident paying event. So far, the balance sheet is very lightly leveraged. So there is also possible some play over there.

**blast_investor** Wed Jul 25, 2007 11:04 pm

Buffett still owns ASD as of March 2007.

ASD mainly has 3 divisions, Bath and kitchen, which suffered a set back recently, home HAVC (air conditioning, heating equipment), and car/truck electronic.

The spin off divison is car/truck electronic, which had grown fair well.

HAVC division obviously qualifies Buffett durable competitive growth stock profile and probably is the main interest of Buffett interest.

**grapes** Thu Jul 26, 2007 7:09 pm

The trouble I found to analysis the WBC (ABS brake division) is lacking of comparables. I can't find any public company in the same business as them. In fact, in annual report, it looked like there is only one major competitor in Europe. Also, the cyclic nature of this business is also unknow to me. To me, the startup of building new trucks is for sure cyclical. However, it looked like WBC grows not badly in the last 13 years. Is it due to lack of competition?

Blast, do you have anymore information on this? Or any suggestion of where to dig out the business prospective of this buisness.

blast_investor wrote: Buffett still owns ASD as of March 2007.

ASD mainly has 3 divisions, Bath and kitchen, which suffered a set back recently, home HAVC (air conditioning, heating equipment), and car/truck electronic.

The spin off divison is car/truck electronic, which had grown fair well.

HAVC division obviously qualifies Buffett durable competitive growth stock profile and probably is the main interest of Buffett interest.

**blast_investor** Fri Jul 27, 2007 12:30 am

American Standard to sell bath, kitchen lines for $1.76 billion in cash
http://www.marketwatch.com/news/story/american-standard-sell-bath-kitchen/story.aspx?guid=%7BF218C825%2DF3B8%2D49EF%2D8DD6%2DD208C077108D%7D&siteid=yhoof

Essentially, ASD now splits into 3.

**blast_investor** Fri Jul 27, 2007 12:34 am

Hi grapes,

We have been studying ASD for quite long time (years probably).

ASD car division is mainly electronic business, those automatic control in cars or trucks.

This business in Europe seems to be in good shape with little compeition due to help from government regulation. European Government set Electronic standard, which usually requires lots of high cost geers. Per car revenue rose significantly for this division.

This is very different in Asia (China) or US where government regulation does not help electronic business that much.

I like ASD HVAC business (the core one) most. Buffett investment itself already tells that.

**grapes** Fri Jul 27, 2007 1:33 am

Can you share a little bit what do you think about the prospect of the car business in the next several years? Also if possible, some links or reference supporting it?

blast_investor wrote: Hi grapes,

We have been studying ASD for quite long time (years probably).

ASD car division is mainly electronic business, those automatic control in cars or trucks.

This business in Europe seems to be in good shape with little compeition due to help from government regulation. European Government set Electronic standard, which usually requires lots of high cost geers. Per car revenue rose significantly for this division.

This is very different in Asia (China) or US where government regulation does not help electronic business that much.

I like ASD HVAC business (the core one) most. Buffett investment itself already tells that.

**blast_investor** Fri Jul 27, 2007 10:31 am

Too hard to figure out the car electronic business.

I would put this into cyclical industry, same as car parts business.

grapes wrote: Can you share a little bit what do you think about the prospect of the car business in the next several years? Also if possible, some links or reference supporting it?