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Moving Past An Asbestos Cloud


Inside Wall Street

MOVING PAST AN ASBESTOS CLOUD

Long shunned by investors because of asbestos-related lawsuits, Fibreboard (FBD) is now catching the fancy of some smart-money pros. Why? Apart from very possibly beating the asbestos heat, Fibreboard is emerging as an attractive asset-value play. The stock reflects the switch in Fibreboard's profile: Trading at 26 in early December, the stock has hit 36. Stuart Rudick of Rudick Asset Management, puts Fibreboard's breakup value at 70 a share.

Fibreboard has "rapidly evolved into a financially thriving building-products concern, from an asbestos-impaired forest-products company," says John Stanley of Dillon Read. The company's asset gem is 80,000 acres of timberland in the Sierra Nevadas. The acreage is valued on the books at $35 million, but its current market value is about $240 million, or $28 a share, based on recent timberland sales, says Stanley. Apart from producing lumber and insulation products, Fibreboard develops and operates ski resorts in Northern California. Last August, it acquired Norandex, a low-cost producer of vinyl siding.

A federal court is expected to approve an agreement reached by Fibreboard with primary insurers to cover liabilities from asbestos lawsuits. Stanley and Rudick believe the ruling will be favorable and dissipate concern about the liabilities from Fibreboard's asbestos-linked products before 1959, when most of the exposure occurred. The agreement would have insurers pay all pending claims and provide a $1.5 billion trust fund for future claims.

Stanley figures revenues will jump to $524 million this year from $363 million last year. He sees net rising to $4.10 a share from $3.51 last year.BY GENE G. MARCIAL


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