Blue Bird Corporation (NASDAQ:BLBD)

Removing BLBD from Buy On Pullback Model Portfolio #11

We are removing Blue Bird Corporation (NASDAQ:BLBD) ($38.38; $1.2B market cap) from our Buy on Pullback Model Portfolio #11 as shares have surpassed our near term price targets of ~$35. The stock was added to the portfolio on September 25, 2023 when it was trading at $19.29. Shares are now at $38.38 up 98.9%. 

Blue Bird Corporation (NASDAQ:BLBD) ($24.50; $788.0M market cap) announced a record contract for 180 electric school buses. The company has received the single largest order of electric school buses from a school district in its history. Los Angeles Unified School District (LAUSD) ordered 180 electric, zero-emission school buses through their local Blue Bird dealer, A-Z Bus Sales, Inc.

BLBD is the leader in electric and low-emission school buses.

BLBD ($19.35) announced Q2 2017 results:

• Sales of $208.7 million vs $191.2 million in the prior year; ahead of analyst estimates of $195.9

• EPS of $0.07 vs $0.02 in the prior year; below analyst estimates of $0.15

• Reaffirmed full year 2017 guidance (see in management quotes)

Quotes from management:

“Our second quarter sales were strong with double-digit growth in unit volume and we secured a number of first-time accounts,” said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “We maintained our strong leadership position in alternative-fuel-powered buses, with year-to-date orders 43% higher than at the same time last year. With a strong backlog of new bus orders that take us into the fourth quarter, we are pleased to reaffirm our full-year fiscal 2017 net revenue guidance of $980 million - 1,010 million, Adjusted EBITDA guidance of $72 - 76 million and Adjusted Free Cash Flow guidance of $38 - 42 million.”

While we closed out our long position in BLBD common stock on April 11, 2017 as shares were hitting new highs of $18.35, we remain long via BLBD warrants, trading as BLBDW. We bought the BLBD warrants (BLBDW) at $1.20 and they have since increased in price to $3.95.  We initiated our position in July 2016 as a special situation play when the stock was trading ~$14.00, based on what we perceived as a potential shareholder abuse case, but with substantial upside.

BLBD ($15.50) - Tappan Street Partners files a 13G showing a 5.8% stake.