"I would be interested in no_slapps opinion on NPK."
With respect to the recent peak price, it can be said that buyers of NPK show the same signs of irrationality as those who drive other stocks to prices unsupported by the fundamentals of the companys' operations.
NPK's stock price has a floor that reflects the book value of the cash and other liquid assets on the balance sheet. That floor might have climbed a bit because it's likely the stock market now values the operations for a sum greater than zero.
Not long ago, the market price suggested the operating business had no value. It wasn't true; the business had value. But its future was cloudy.
Management took a big step when it jettisoned domestic manufacturing. By shifting production overseas, management was able to improve the operating margins for the gadget-making part of the business.
Will the military fuse business pay off due to our current military engagements? Hard to say. And we don't know how long the military sales will continue.
So what is NPK worth? Probably less than the current price of about $45. This company still suffers from a lack of growth opportunities and from the lack of a growth orientation in the ranks of top management.
pmlljl, the following is a post I copied from the SFP message board. It demonstrates some thinking from a person who is probably involved in the "distressed" sector of the bond market.
---------------------------------------- Here are a few numbers from a buy side analysis they are using. Normalized EBITDA of $62.5m x 5.5 for EV of $344m. Curious. This analyst argues SFP was able to average over $100m for six years and to use $62.5m is because of aggressive cost cutting measures.
My numbers: using his $62.5m EBITDA
$129m has agreed to tender for $77m of 2nd lien bonds. This leaves $153m remaining. ASsume $30m more tenders leaves the numbers: tendered $95m remaining $123m
for a total of $218.
So taking the senior paper: $175m bank debt $95m 2nd lien equals $270m
This leaves $74m for $123m of remaining debt or $60 for the remainder.
Take that EBITDA to $50m and you have EV of $275m minus $175 bank debt minus $95 2nd lien leaves $5m for $123m or 4% recovery.
Take that EBITDA to $40m and your looking at $220m for EV. minus $175m bank debt and 50% recovery for 2nd lien and zip for the remainder.