Comments on: EMCOR Group Inc. (EME)

By: Tom

Tom — Thu, 16 Apr 2009 10:08:08 +0000

Black-Scholes is considered to be flawed by Taleb. He uses another option pricing formula (forgot off the the top of my head what its called) that helps factor in volatile markets better. I like EME because of the infrastructure play.

By: Kyle Degruttola

Kyle Degruttola — Wed, 15 Apr 2009 23:43:49 +0000

Their FCF2 looks good, they are trying to move into a oligopsony market place, which when speaking about the government is a good thing. Looking at the % of accounts payable verses liabilities indicates that they are using operating leases to a great extent. Many times companies do this to convey that there ROA is very high and that their long term debt is very low, however, in this case it could be of strategic significance as these are most likely property leases. Property leases can be renegotiated to better reflect current market conditions. I think that the company has potential and I would look at the $10 strike OCT 16 2009 Call options that were last traded at $6.30. That maybe a nice way to have a larger cash reserve available incase something that you like more comes around while still giving you the opportunity to be involved in this position. The Black-Merton-Scholes model has the call priced at about $11.32 so that may be of interest at current levels or a little above as a small part of ones portfolio. At least that’s what I think but I am not all that smart of a guy though.

By: Tom

Tom — Wed, 27 Feb 2008 11:20:00 +0000

So does that mean they’ll be exiting right now? According to the latest S&P report, EME is owned by a lot of institutions.

By: sherry

sherry — Wed, 27 Feb 2008 07:12:00 +0000

I heard that fund managers always go the opposite direction of the masses, when everyone comes in they’re exiting.