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  "documentTitle": "A.O. Smith Corporation (AOS)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-05-16 00:00:00",
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  "notes": "The slide uses a sum-of-the-parts valuation approach, adjusting for illiquidity of cash in China and applying different multiples to regional business segments.",
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      "text": "Our valuation method considers that AOS’s China business should not be valued on the same multiple as its U.S. and North America business.",
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      "text": "Price Target: $17.71-$27.27",
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      "text": "Our valuation method considers that AOS's China business should not be valued on the same multiple as its U.S. and North America business. In addition to China, AOS's ROW business includes India, which has struggled to deliver on its historical promises to turn a profit and still projected to lose money (3). We also do not believe the China business has stabilized and see risk that AOS continues to miss Street estimates in the back half of the year, increasingly so as the China trade war lingers. Investors must consider that ~84% of AOS's cash is trapped in China, and not freely convertible or easily repatriated. As a result, we apply a 15% illiquidity discount to the cash.",
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      "kind": "quote",
      "text": "“The overall loss in India is expected to be $2 million to $3 million in 2019.” — Q1’19 conf call",
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      "text": "1) Based on 84% of total reported cash in China per 2018 10-K\n2) Conservative 15% discount\n3) Per Q1'19 conf call: “The overall loss in India is expected to be $2 million to $3 million in 2019.”\nNote: Downside Based on $48.20 share",
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      "text": "Valuation table showing Sales Multiples, Enterprise Value, Cash adjustments, Debt, Diluted Shares, and Price Target calculations.",
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      "text": "Spruce Point Estimates Approximately 45% – 65% Downside To A.O. Smith",
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