Blount International, Inc.
Thesis
BLT is undervalued due to misconceptions about its exposure to the U.S. housing market, with over 70% of sales coming from international markets. The company has a strong niche position with a global market share of 60-70% in saw chains and guide bars, and it trades at a significant discount to its intrinsic value, which is estimated at $27.00 per share compared to the current price of $14.87, representing a margin of safety of 45-55%.
Did it work?
The long thesis rested on a large margin of safety, with intrinsic value estimated at $27.00 versus a $14.87 entry price. Instead of converging toward intrinsic value, the stock collapsed 70.4%, decisively invalidating the valuation call — either the estimated margin of safety was illusory or the underlying business deteriorated severely. A decline of this magnitude is far beyond normal noise for any reasonable holding period, so the thesis is judged a failure regardless of the unknown elapsed time.