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National Presto Industries Inc. Message Board

  • Benji_Compson Benji_Compson Oct 17, 2003 3:36 PM Flag

    Acquistion

    Be still my heart!! Another acquistion in less than a decade.

    Any thoughts on the deepening involvement in absorbent products? Quagmire or opportunity? That is the question.

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    • pmlljl, yes, I am telling you the stock is not selling at 4 times book value. A more accurate figure is 1.5 times book value. Yahoo is frequently wrong with this calculation.

      KNCT is of interest on a relative-value basis because its peers trade closer to 2 times book value. Meanwhile, this is a short-term opportunity and there will be more thrift opportunities like it in the future.

    • no_slapps: I can understand how yahoo could be wrong about earnings for a partial period report. Are you also saying they are wrong about book value? I have not had many goood experiences when I bought stock at 4 times book. Therefore, I don't do it anymore. It is still a no go for me. And I don't even care enough about a 4 times book stock to research it any further.

    • pmlljl, if you use Yahoo numbers for anything you are throwing all caution to the wind. KNBT went public November 3. If you want the correct figures, look at the prospectus which is available online from the SEC.

      Regarding KNBT, the Yahoo figures probably account for only a single quarter of earnings which were probably automatically counted as a trailing 12-month figure.

      Anyway, in a backhanded way, I'm glad Yahoo is mistaken. That Yahoo flaw will probably cause others to look elsewhere for opportunity.

      For another interesting opportunity, take a look at FF, a closed-end fund of thrift stocks. It will likely declare a capital gains distribution of $3.50 a few days before Thanksgiving. (It currently trades around $18.50). Note that over the last dozen years it has delivered rather substaintial payments to stockholders. Of course, it paid essentially nothing in 1999 and 2000.

      The remarkable aspect of FF is that most years (years when thrift stocks have performed well)its share price climbs from the beginning of October until the ex-date, which occurs near the end of November. The amount of the increase over that time frame is usually about equal to the capital gains payment. In other words, the stock price does not discount the big payment.

      This year, the stock traded around $15.65 at the stock of October. It is now $18.50. Meanwhile, the Net Asset Value of the fund is about $19.15 (as of October 31). Assuming the market price of the fund meets the net asset value, those who invested at the start of October will post a healthy gain. Following the announcement of the capital gains total, the stock price will adjust. Thus, investors can sell on the eve of the ex-date and scalp a short-term capital gain, or collect the payout which will be taxed partially as a long-term capital gain and partly as a short-term gain.

      It's a nice little play and I've done several times over the decade that I've owned the fund. This year I put in a bundle.

    • no slapps: YAHOO says KNBT is 43 times earnings and 4 times book value. Not my idea of undervaluation! Case closed! Would you care to try again.

    • pml-

      The only big oil I had was CVX and I also sold that after a quick rise. Missed some more upside on it but the more I learned about the company, I decided I didn't want to be in it - the risks as you mention plus they haven't been performing nearly as well as one would expect. I'm going for the smaller exploration type companies. More bang for your buck. The only biggie I have there is a small bit (100 sh) of DVN that I am about even on.

      The little guys like IVAN have really been kicking. (Although I am bailing on that today - starting to thin my holdings there).

      Best of luck
      clack

    • Clack: Best of luck with MRK. I am kind of bummed with it because I've owned it for a few weeks and I am down about 10%. I think I may buy more BRKB. There is nothing like it.

      I took a short term flyer on RD and BP a short while back, but when they went up almost immediately, I sold them. Now they are back below where I bought them. With commodity prices generally stronger you would think that the big oils would be good, but they haven't done much and earnings were kind of blah. Now we've got political problems in Russia related to oil where BP and RD have made some fairly big commitments. I am reluctant to buy back in but I wish you well with your energy stocks.

    • Yes, another move into absorbent products!

      Natl Presto Buy Adds Adult Diapers, Housetraining Pdts
      Friday October 17, 1:48 pm ET

      EAU CLAIRE, Wis. (Dow Jones)--National Presto Industries Inc. bought the assets of privately-held NCN Hygiene Products Inc., a maker of adult diaper and pet housetraining products, furthering its plan to develop its absorbent products unit.

      In a press release Friday, National Presto, which has units that provide small household electric appliances as well as baby diapers and pressure cookers said the Marietta, Ga. company had about $10 million in sales last year. National Presto raked in $133.7 million for the 12 months ended Dec. 31.

      NCN currently supplies private-label and institutional customers.

      • 1 Reply to no_slapps
      • no slapps: I have had an excellent year in the stock market and have sold a lot of shares. Consequently, I have a lot of cash but I can't find anything reasonably priced to buy. I am still considering buying more NPK but I would like to buy it a little cheaper than the current quote. Therefore, I was wondering if you would crank up your poison pen and say some really nasty things about the company and its shareholder unfriendly management and drive the price down a few points for me? Will you do it? I am asking you because I know you have lots of experience at just that activity. Thanks in advance!

 
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