Dutton Associates Announces Investment Opinion: LESCO Neutral Rating Maintained By Dutton Associates
May 01 2007 - 12:15PM
Business Wire
Dutton Associates continues its update coverage of LESCO Inc.
(Nasdaq:LSCO) maintaining its rating at Neutral. The report by
Dutton senior analyst Paul Resnik, CFA is available at
www.jmdutton.com as well as from First Call, Bloomberg, Zacks,
Reuters, Knobias, Investars and other leading financial portals.
Over the past five years, LESCO has been engaged in an ongoing
restructuring as it has sought to increase profitability and put
itself on a growth path. The Company has changed top managements,
exited manufacturing activities while remaining committed to
purchasing products from the sold facilities, restructured and then
disposed of its distribution operation, sought to lock in material
costs and then shifted away from locking in costs, and disbanded
and then reconstituted its direct sales team. Earnings have
reflected the missteps in these efforts and the Company reported a
substantial loss from operations in 2006. We expect LESCO to show
significant improvement in 2007, but to report a loss, albeit a
significantly smaller one. We changed the rating on LESCO to
Neutral on July 7, 2006. On February 19, 2007, it was announced
that LESCO had agreed to be acquired by John Deere & Co. (NYSE:
DE) for $14.50 in cash per share. At that time, we commented in a
Research Note that �although we believe that LESCO�s unique network
offers the potential for sustained growth over the long term as
near term difficulties are resolved, the proposed price, in our
judgment, represents a reasonable offer in light of near term
profitability issues.� With the shareholder vote on the acquisition
scheduled for May 3, 2007 and the stock trading at the acquisition
price with some holders indicating opposition to the deal, we
thought a review of the Company and the offer would be appropriate.
About Dutton Associates Dutton Associates is one of the largest
independent investment research firms in the U.S. Its 31 senior
analysts are primarily CFAs, and have expertise in many industries.
Dutton Associates provides continuing analyst coverage of over 145
enrolled companies, and its research, estimates, and ratings are
carried in all the major databases serving institutions and online
investors. Our annual research coverage, which currently costs US
$35,000 prepaid, is 4 Research Reports, typically published
quarterly, and requisite Research Notes. Dutton Associates received
$85,738 from the Company for 13 Research Reports with coverage
commencing on 3/12/2003. We do not accept payment of our fees in
company stock. Our principals and analysts are prohibited from
owning or trading in securities of covered companies. The views
expressed in this research report accurately reflect the analyst's
personal views about the subject securities or issuer. Neither the
analyst's compensation nor the compensation received by us is in
any way related to the specific ratings or views contained in this
research report or note. Please read full disclosures and analyst
background at www.jmdutton.com before investing.
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