With a transaction total of more than $10 million, Oaktree
acquires 1,068,288 shares of industrial steel mill services
provider TMS International Corp. (
), documented in Marks' latest 13G SEC filing, reported on
GuruFocus Real Time Picks
This positions Marks as 7.37% owner of TMS International.
With a focus on risk control, Marks is legendary for investing in
companies ridden with distressed debt, that do well in unstable,
less efficient markets.
The Oaktree Capital website described it best: "Above average
gains in good times are not proof of a manager's skill; it takes
superior performance in bad times to prove that those good-time
gains were earned through skill, not simply the acceptance of
above average risk. Thus, rather than merely searching for
prospective profits, we place the highest priority on preventing
losses. It is our overriding belief that, especially in the
opportunistic markets in which we work, 'if we avoid the losers,
the winners will take care of themselves.'"
The new addition of TMS International seems to reflect Marks'
Despite the company's second quarter financial results revealing
a $1.4 million decrease in the company's total revenue compared
to the same time last year, TMS International also experienced
several increases, including for its adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA), net
income attributable to common stock and revenue after raw
"TMS International produced solid second quarter results..." said
Joseph Curtin, TMS International president and chief executive
officer, in a press release. "We are pleased that the
risk-minimizing features of our business model enabled us to
avoid material inventory write-downs despite significant declines
in commodity pricing, which occurred during the quarter."
TMS International's basic and diluted earnings per share were up
92.3% for the second quarter compared to the same time last year,
from $0.13 to $0.25.
Its revenue after raw materials costs went from $137 million in
the second quarter of 2011, to $153.6 million in the second
quarter of this year, a 12.1% increase; its adjusted EBITDA for
the quarter rose 13.1% from $33.5 million to $37.8 million.
The company's six month fiscal results also reflected increases
for all categories, this time including total revenue.
"Despite the continued uncertain global economic environment, we
continued to produce strong financial results by focusing on
creating value and delivering exceptional service for our
customers globally," Curtain said.
TMS International will announce its 2012 third quarter financial
results on Nov. 1.
As parent company of Tube City IMS Corp., TMS International
operates about 80 facilities in 11 countries, and about 30
brokerage offices that buys and sells raw materials across five
continents, according to its website.
In July and August, TMS International announced vast new
opportunities for expansion, after acquiring several new
contracts with various outsourced mills services in and outside
of the U.S. (a $91 million transaction), and the opening of
several trading offices in Brazil, Florida and Texas, marking the
company's first formal trading group presence in both Brazil and
Trading at $10.21, TMS International has a market cap of $401
million. It has a P/E (ttm) of 17.5, a P/B ratio of 1.4 and a P/S
ratio of 0.2.
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