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The L.S. Starrett Company Message Board

  • nick.mach nick.mach Jul 20, 2006 3:33 PM Flag

    New low by October

     

    Although only 36% held by institutions, got a feeling there is going to be some institutional selling by the end of October (tax loss fiscal year). Driving it down to an all time low.

    Good Luck

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    • nick.mach:

      Your new low arrived early. Maybe they will set a series of new low from now through October.

      Single digits anyone?

    • -A new low isn't saying too much, since the low is just 25 cents under the close Fri.

      -But I don't think institutions will sell this stock; but individuals might.

      Institutions are more likely to do something about it's bad performance.

      The question for me, is just what does the balance sheet show us?
      On the surface, SCX is just an underperforming company with a very strong balance sheet.-For instance, BV almost twice market price, and the rest of the numbers look good also.

      -But there are a lot of value funds that own SCX, I think for (maybe) undervalued assets.
      It's an old company, and just what are these assets really worth?

      Many times with old companies like this, assets are worth a lot more than those showed on the books. For instance, if factories were build many years ago, these kinds of assets (plants and hand) could be worth 2 or 3 times as much as on the books, especially after depreciation as shown in the balance sheet.-And replacement costs could change the value even more.


      On the surface it's one of the cheapest stocks around- just strictly on Book/Price, cash per share, etc..
      -But again, I don't think that these institutions will sell at these low prices- 13 dollars or below; but they could arrange a sale of assets for SCX-if assets are a lot more than shown on the books, or force present management out of the picture, or even sell the whole company.

      Institutions have a lot more patients than individuals; but their patients is not unlimited.

      I bought at 13 as a value play.
      -Just have to wait to see if I'm right.
      The good thing about SCX compared to other stocks, is that the balance sheet appears to be strong enough for SCX to stay around- it won't go kerput.

      Good luck, whatever it does.

      • 2 Replies to rainforest982000
      • " or force present management out of the picture, or even sell the whole company."

        I believe if you dig a bit deeper you will find that there is another class of stock or voting shares/something (I've forgetten the details) that gives management (family) control over the voting stock of this company. Therefore the shareholders can never force a change in management or sell of assets to benefit the shareholders. Shareholders are just along for the ride and might get a bone thrown their way but don't count on it based on the last 5 years.

 
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