Get ready for some cheap product just like the rest of the small appliance makers are putting out. Glad I have two electronic coffee percurs and my trusty pizza cooker both which I expect to last until my demise. The best thing this company could do is liquidate but the hebs need jobs I guess.
Have not owned since dividend cut. Check it every now and then as a value stock. I maintain a list of these types of stocks. If they weaken enough they are a way to possibly gain a few hundred bucks without a lot of risk. If it gets much lower I may take a chance on a thousand shares but you have to watch the spread and use limit all or none orders on the buy side. And cut losses if it weakens much. As usual, after dividend, it is near it's low again and equal to cash like assets.
mikehunt: I can't argue with hardly anything that you said in this post, particularly the need to understand financial statments. For most investors this is a lost art. What do your methods and analysis tell you about NPK? Since you are writing on NPK's board, I assume you own the stock, or are you short? Temporarily, I forgive you for knocking $1 off the price of the stock because I have an offer in to buy at $25. Please drive it down there and fill my order.
The key to investing is to buy only those stocks that go up. If they don't go up, don't buy em. Seriously, rule #1 is cut your losses, in order to rule #2, preserve your capital. Stocks take patience, lots of study, the ability to read financial info, and a degree in economics. The action and direction of the stock (except those big ones that the money managers toss around) tells me all I need to know about inside info on the types of stocks I bet on. And a skeptical distrust of wall street is a must. I figure most people don't belong in the market but it is a good thing they are.
Pmlljl, I stated the following in a previous message which was part of our exchange:
"Still, though the stock market values NPK's operations at ZERO DOLLARS, I do not."
In other words, the operations have value to the right buyer.
no_slapps: I hope you won't be too disappointed to learn that our little debate will soon end. I made a genuine offer to buy your stock at the current price and put an end to your whining. Apparently you think the stock is worth more and will press ahead with your rantings in an effort to get the company to sell out. Fine. I hereby withdraw my offer and I will buy more on the open market from time to time. I also think the company is worth substantially more than it is selling for and I think it will make real money in the future.
What I can't understand is why you hang onto a stock that you so vehemently detest. First, you said that it may go bankrupt. Then you said its day had passed. Its existing products were dated, it had no new good products, the company was mature, geriatric even, and that the Cohen's didn't know what they were doing and that they were unfair to their shareholders. What kind of an investment is this for you to own? Can't you find any that you would be happier owning? Are you waiting to get even? Why do you torture yourself? Is this part of your therapy? In the immortal words of Bill Clinton, I personally think you should "move on".
Finally, I also don't understand your strategy. You want to have the company sold, I presume, at the highest price. But your entire posts on this board are derogatory of the company, its products, its strategy and its management. Rhetorically, I ask you, who would you sell the company to? Based on your evaluation, who would buy a single share of it, let alone the whole company? If you were trying to sell your used car would you point out to each potential buyer every scratch and dent? Would you tell them it had been in four accidents? Would you tell them the battery was weak the tires were bald the transmission was about to go and the compression was bad? I would be honest, but I wouldn't go around broadcasting every known and suspected but unproven defect? Please cool it with the criticism!
Pmlljl, you begin your messages by stating that you disagree with me, but by the time you are done explaining yourself, you unintentionally confirm that you actually see things my way.
i.e. The Cohens have earned a "lifetime achievement award". In other words, the glory days are long gone and we all know it.
You rhetorically ask who has done a good job in their industry. Well, the answer is to look at industry action of a couple of years ago.
Several takeovers of NPK's competitors were completed. The deals were done at impressive P/E levels and prices to book value. I posted the deals at the time, but I'm not going back to review them or retrieve the names of the buyers and sellers, though EKCO was one of the acquired companies, as I recall.
In other words, it's possible to sell out at a healthy premium.
Meanwhile, the cash on the balance sheet belongs to the common stockholders. Though keeping a hefty pile is comforting to many, it also disguises the fact that the company doesn't earn anything from operations. Had the company been distributing to the shareholders what is theirs, the company would have had to improve its operations rather than loaf.
The fact that the Cohens are honest, well intentioned managers only supports the fact that even the best business practices fall short of alternative strategies, such as recognizing the world has changed and left them behind and maybe it's time to sell the ranch.
Meanwhile, your insistence that they will not sell the business is either your baseless assertion, or you have a direct line to the board room.
I'll assume it's your baseless assertion. In any case, the idea that a sale of the company represents an opportunity to make a "quick buck" is good for a laugh. The stock has declined for several years straight, finally bottoming at the value of cash on the balance sheet. To sell at this point is simply the most rational of all possible strategies available to management.
Is NPK likely to make a meaningful acquisition? Based on its history -- no. Despite having a pile of cash, management thinks it's best to tiptoe along, buying little companies it has no experience running. That's fine. But that strategy will never raise returns.
Does the company think its industry will ever resume its former profitability? No.
R&D is never easy. But it is the lifeblood of many companies. Clearly, if you can't dream up new and impressive products that consumers want, your only chance to make money is be the low-cost producer of existing offerings. NPK has not adjusted to this market reality.
I think management will realize it is in a corner and sell the business for more than the current stock price. I'm prepared to wait.
no slapps: I to have a past connection with MCI and Worldcom. In about 1995 I started an account with a professional money manager. One of the stocks he bought for me without my approval was MCI. I knew MCI was a real company and I would not have resisted including it in the portfolio. Later, of course MCI was acquired by Worldcom and I told my manager that Bernie Ebbers was a con-man and that I thought Worldcom would go to zero. Since I could not prove it and I did not want to pay him and then tell him how to do his job I allowed Worldcom to remain in the portfolio. Still later, Worldcom offered to buy Sprint for $125,000,000,000. This was a patently absurdly priced acquisition and was eventually scotched by the regulators. When I received the prospectus for the Sprint acquisition I copied the Worldcom balance sheet showing $40,000,000,000 of goodwill and told my manager that their was no way with its very meager reported profits and suspect balance sheet that it had any economic goodwill and that someday they would have to write off that goodwill. At that time, I also insisted that he sell the Worldcom stock and the shares of the new MCI spinoff. I managed to get about $20 per share and I avoided the subsequent wipeout. I am telling you this long story to explain that even though Worldcom's stock appeared to be performing very well for quite a while the company itself was rotten to the core and cooking the books ever since Ebbers got control of it and started to make serial over-priced acquisitions to impress Wall Street with Worldcom's rapid growth. This kind of situation is what I am thinking about when I refer to Wall Street morons. They simply don't know how to price stocks and the they can't tell the difference between a con-man and an honest person.
Now I don't say that the Cohen's have done a really great job lately, but in their industry, who has? And it is not easy to come out with popular new products like clockwork. If it was, you and I would be doing it instead of wasting time debating this subject. My support of them is more of a "lifetime achievement award". I contend that they are honest and do the company's accounting correctly. They haven't given us all the cash and they were slow to react to asian competition and the change in the retail market. But they haven't cheated their shareholders and they haven't blown the many years of accumulated profits. And for your information they they don't do business with K-Mart which shows some foresight. The shareholders of Fleming can only wish that their managers had such judgement. So I again request that you forget the idea to try to get them to sellout so we stockholders can make a quick buck. They aren't likely going to do it. My offer still stands.
Pmlljl, there's little point in debating the merits and demerits of Worldcom. But your approach to WCOM and NPK is worth noting.
With Worldcom, you focus on the last couple of years of its history, when it was overtaken by corrupt influences and went down the tubes. I merely pointed out that there was a time when it wasn't corrupted. Many years ago I owned MCI, and I followed Williams Companies when it owned LDDS which was spun off and ultimately became Worldcom.
However, I would never suggest investors should consider buying the stock of a company because it was once a sound operation. When things change for the worse it's usually time to look for another opportunity.
Meanwhile, your only reason for supporting NPK is because it accumulated a cash hoard during the good years which it has yet to deplete. You criticize WCOM and its management for its recent performance, but ignore recent management weakness at NPK.
Still, though the stock market values NPK's operations at ZERO DOLLARS, I do not. But what are NPK's operations worth?
That's a tough call. The company has lost major contracts, seen other major contracts cut way back and witnessed the bankruptcies and closings of some of its retail outlets.
If NPK distributes through K-Mart, it faces the likelihood of another closure. Will relocating production offshore open new doors to NPK's products? It's too soon to tell.
However, there is little risk in holding the stock since it is almost as safe as a money market fund as a result of the securities portfolio. But equity investors are not seeking money market safety. Equity investors are looking for returns above the risk-free rate. NPK has failed to deliver for years and years, and the stock price slipped lower. The dividend was cut as well.
The best solution is the sale of the company to a management that knows how to revitalize this mature, in fact, geriatric corporation.
no slapps: First, Worldcom was never a successful company. It was a mishmash put together by Bernie Ebbers and his henchmen along with a complicit group in Wall Street. I contend that Bernie cooked the books from the beginning and that Salomom's Jack Grubman and others hyped the stock to a high price allowing Ebbers to use Worldcom's stock as a currency to buy other real companies such as MCI even though Worldcom paid very high prices. Recently, Worldcom announced that it would take charges of $80,000,000,000 to write off its "goodwill" and to write down other assets, namely equipment. You have to understand that this didn't happen by accident and it didn't happen without management knowing about and approving it. I contend the same thing is happening at Amazon as well. They aren't so much cooking the books as Worldcom did but they are hyping "pro forma" income where they tell you what they are earning if you don't count their legitimate expenses. It is like most people saying they would be cash flow positive if you don't count my mortgage payment, my car payments, insurance, food, clothing and gasoline. In addition, Amazon has on its balance sheet $70,000,000 in goodwill. I imagine this is the result of some acquisition but economically speaking no company that has accumulated a $3 billion deficit and never had a legitimate quarterly profit has any goodwill. So you can consider that to be written off someday.
The point is some of these business men lie and they cook the books. As investors it is our job to determine who we want to be partners with. All that cash on NPK's balance sheet is the result of money earned by the company in prior years besides the dividends paid. I looked at last years proxy statement yesterday and noted that Mr. Cohen has been a director since 1949. So all that cash was accumulated during his tenure and my guess is that without him NPK would not exist today. So, if you are not happy being a partner with the Cohen's I hereby offer to buy all your shares at the current price assuming you own less than 5,000 shares. What do you say. Let me know if you want to sell and I will put in a bid at the market price which you can hit.