Quarter in Review
|Apr 22, 2012|
And, we're back. I've been on vacation. It's good to be home and I will have more stock ideas coming your way soon. Thanks for your patience!
I've been blogging for three months now, and I think this is as good a time as any to review the ideas I've presented so far and remark on any developments at the companies.
All quiet for QEP. The company won't be releasing its annual report until late May, but I expect big numbers when it does. The stock price has meandered higher, but the bid/ask spread has blown out and liquidity has been nearly non-existant.
Schuff released its annual report on March 14, 2012. Adjusting for the one-time goodwill writedown, the company would have earned approximately $2.5 million for the year. The company's backlog is $258.83 million, compared to $244.97 million at previous quarter's end and $173.37 million at the previous fiscal year's end. If business continues to pick up, Schuff's earnings per share will increase dramatically, particularly with fewer than half as many shares outstanding as in the last upcycle.
McRae continues to tick along as usual, profitably and conservatively. Investors have taken notice of the strength of earnings and the quality balance sheet and bid the shares up to a 33% total return since I wrote on the company. Revenues dipped slightly in the most recent quarter, but earnings increased 33.9% compared to the same quarter in 2012. Earnings for the six month period were up 19.3% over the same period last year, though revenues slipped by 3.1%. The company's trailing P/E ratio is now 9.5. The company continues to maintain significant excess cash balances.
Webco's second quarter revenues climbed 13.4% over the same quarter in 2011, while earnings slipped. The company's capital spending program is on track with the new facility scheduled to open in 4th quarter 2012. Most encouragingly, the company's operating cash flow has been healthy, totaling $30.80 million thus far in 2012.
Alaska Power and Telephone
AP&T released its annual report on April 19, followed immediately by a first quarter report on the 20th. Revenues climbed by 6.0% in fiscal 2011 compared to fiscal 2010, with earnings climbing 17.3%. As of the end of the first quarter, the company earned $3.33 million dollars in the twelve trailing months, or $2.21 per share. at the current bid/ask midpoint of $16.61, AP&T's trailing P/E ratio is only 7.5. The company continues to deleverage its balance sheet, raising its equity-to-assets ratio from 27.3% when I posted to 28.4% at present.
Steel Partners Holdings
Steel Partners Holdings successfully uplisted to the NYSE and now trades under the symbol SPLP. After trading down into the low $11's, the unit price has rebounded to $12.70, outpacing the S&P 500 Total Return Index. The large discount to net asset value persists.
Advant-e reported annual figures on March 22. Revenues increased 3.1% over 2010, with earnings increasing 7.9%. The stock has performed well, providing a total return of 14.3% since the date of my post. The trailing P/E ratio stands at 10.1. Adjusted for cash, the trailing P/E ratio is 8.1.
Empire's annual report revealed revenue growth of 10.7% year-over-year. However, earnings decreased by 45.8% as the company felt the sting of losing the Generalized Systems of Preferences. Disappointingly, the company did not make any reference to any tax refund associated with the re-enactment of the GSP. Ideally, the company's profitability will still be enhanced with the law's return. The company's current trailing P/E ratio of 6.3 reflects a good deal of pessimism and neglect already discounted into the stock price.
Detrex has been on quite a tear, rising 42.4% since the time of posting. Investors finally got around to recognizing the company's newly reinvigorated balance sheet and growing specialty chemical business. The company's first quarter report was all good news, showing strong growth in operating profits. The company's excess cash balances are less robust than what I had used in my initial calculations, but the company still possesses significant excess liquidity and plans on paying a 25 cent dividend in the quarter. In my opinion, Detrex is approaching fair value and I may sell it from my portfolio if fair value is attained.
Siem released its annual report on April 20. Siem's largest holding, Subsea 7, had an excellent year, reporting $434.7 million in net income and over $1 billion in EBITDA. Siem Offshore had a good year by Siem's reckoning, producing a record $123 million in EBITDA, but not recording an accounting profit. STAR Reefers remained a trouble spot, taking a large impairment loss. Siem's potash mining operations recorded a third consecutive profitable year. Due to the impairment loss in STAR Reefers, the company recorded a net loss of $1.34 per share in 2011. However, the merger between Subsea 7 and Acergy SA resulted in a gigantic book value writeup. Siem Industries' book value now stands at $1.776 billion. At current prices, Siem Industries trades at 55.5% of book value and an even greater discount to asset value.