Back in July, Superior Industries' (NYSE:SUP) President Steve Borick noted in the company's conference call that they planned on aggressively buying back stock if the price per share remained at present levels (conference call transcript courtesy of CCBN).
Superior is one of those companies that competes in a business where competitors from time to time do extraordinarily stupid things. Insurance is this way, so is telecommunications. Superior Industries makes aluminum wheels for the automotive industry. Its biggest customers are the massive automakers -- Ford (NYSE:F), Toyota (NYSE:TM), Nissan (NASDAQ:NSANY), General Motors (NYSE:GM), and even Motley Fool Stock Advisor selection BMW (Pink Sheets: BAMXF.PK). At present, this is a business that is fraught with severe pricing pressures as companies mortgage themselves to capture market share. Superior has elected not to play this way, sits with a pristine balance sheet, and waits for the carnage, the "convoluted mess" in pricing in the business, to cease.
In the meantime, though, Superior Industries has to operate as a public company. In this conference call, Borick let it be known that there have been plenty of discussions within senior management to continue buying back shares aggressively at these prices, and even to take the company back private. In Borick's words:
"I might just say, you know what, it's time for us to go private. I'm tired of Sarbanes-Oxley. I'm tired of worrying about quarterly reports to everybody and who is outguessing who, and quite frankly, I'm tired of the OEMs looking at my numbers and continue to try to press us. So yeah, I may buy the whole company back. I've got the money in the bank, and I've got the ability to do it, and it's not a bad idea."
So, tell us how you really feel, Steve. I note that Superior's stock, here two months later, is at nearly the identical price that it was at the time of the conference. Borick noted that the company was likely to take the stance of deploying some of its $150 million in cash to buy back stock every day if the company's stock continued to offer such an opportunity. Well, it's continuing to offer it.
Superior's industry is ugly. Its own condition, in such an environment, is beautiful. Its controlling shareholders and management are clearly exasperated by some of the downsides of being a public company, and they're buying back stock hand over fist. At what point do they just lump the whole thing and take out their minority shareholders?
Bill Mann owns none of the companies mentioned in this story.
