Author Topic: BUKS - Butler National Corp  (Read 4925 times)

spartansaver

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BUKS - Butler National Corp
« on: December 17, 2014, 02:18:03 PM »
First post,

Butler National Corporation

Micro Cap~10M Market Cap/6M Debt

-Small company that manufactures aero equipment and also manages two casinos. Throwing off a lot of cash that is hidden in the earnings by rapid depreciation of casino equipment installed a few years ago. Earnings will likely begin to show through in next few years as depreciation comes off the books.
-Using cash to delever
-Aero business has contributed little lately due to downturn so valuing that part of the business at 0
-Paid down over 7M in debt in last 15 months.

Negatives
-401k plan that matches using stock. In essence the lower the stock goes the more stock they issue, so horrible for stockholders.
-Management has made no indication of splitting business up



Tim Eriksen

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Re: BUKS - Butler National Corp
« Reply #1 on: December 17, 2014, 03:02:12 PM »
Having owned the stock in 2011 and 2012 I would say that you better have a wide margin between the share price and what you think it is worth because management is a huge negative. 

west

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Re: BUKS - Butler National Corp
« Reply #2 on: December 17, 2014, 03:04:02 PM »
I looked at this about a year ago.  It's probably not a bad diversified basket bet, but boy do you have to hold your nose when it comes to corporate governance stuff.  I ended up passing because of this myself.

spartansaver

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Re: BUKS - Butler National Corp
« Reply #3 on: December 18, 2014, 07:02:03 AM »
The business seems to be a better position than 2011 & 2012 as well as cheaper. Was it purely the management that made you drop them Tim?

DTEJD1997

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Re: BUKS - Butler National Corp
« Reply #4 on: December 18, 2014, 07:08:39 AM »
I looked at this company a while back....

I was kind of put off by their casino division.  How do you get synergies from running an aerospace company & casinos?

I also think the casino business (with certain exceptions) is a terrible business to be in.  I am talking from a investment standpoint, not a moral position.  The USA is FLOODED with casinos.  Absolutely deluged.  I would not be surprised if the wave of casino closures & bankruptcy does not accelerate.

Of course, if you could snap up shares for $.12, why not?

Tim Eriksen

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Re: BUKS - Butler National Corp
« Reply #5 on: December 18, 2014, 07:16:40 AM »
The business seems to be a better position than 2011 & 2012 as well as cheaper. Was it purely the management that made you drop them Tim?

The price is certainly cheaper now that is for sure.  Back then the casino was growing revenues 13 to 15% year over year and no matter what costs soaked up the additional revenue.  Near the time I sold growth had stopped.  I believe that was due to additional competition.  The biggest problem was the disconnect between what management said or projected and what would happen.  I began to catch things that showed management didn't think about things the right way.  For example they don't like to pay taxes.  Who does?  But you could tell that it was way too strong of a feeling and decisions were made based off of it.  Their goal should be to make money.  They also did not seem to have any desire to jettison poor performing divisions.

spartansaver

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Re: BUKS - Butler National Corp
« Reply #6 on: December 18, 2014, 12:12:19 PM »
Yeah, the aero business seems pretty horrible and they are hung up on it. In a year or two the debt will be paid down and they will have a lot of FCF and they have at least been smart in using it to pay down debt. It's hard to know what they will do with it and it seems near impossible for an activist to come in, but at these levels it is ridiculously cheap.

DTEJD1997

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Re: BUKS - Butler National Corp
« Reply #7 on: December 11, 2019, 11:05:29 AM »
yo, Yo, YO

Who be needin a new 52 week high?

I certainly do!

BUKS has hit a new high today of $.80/share.

I think this is on the news that their gambling license has been extended 15 years.  As such, they should be able to get a mortgage for their casino.  This will enable them to execute the option to buy the land.  Buying the land will be cheaper than renting, so it will be immediately accretive to earnings.

Oh yeah, almost forgot...they are printing money in the aviation division and putting up some pretty good earnings.

Even with this bigly run up in price, stock is still only trading at a 7X P/E.

Can we break through $1/share?  I think we can with another good earnings report and confirmation of my suppositions.

DTEJD1997

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Re: BUKS - Butler National Corp
« Reply #8 on: December 13, 2019, 09:35:10 AM »
Hey all:

BUKS posted a decent quarterly earnings earlier today.  Earned $.03/share for the quarter.  Got the 15 year extension for the casino license.  Balance sheet improved.  Overall a good quarter.

Please see:

www.prnewswire.com/news-releases/butler-national-corporation-announces-second-quarter-fiscal-year-2020-financial-results-and-conference-call-300974678.html

One of the bad things (and it has been a problem) is the share dilution.

We will see, interesting times ahead.