Back in about 2003 I was buying NPK stock in the $26-$30 range. Critics were complaining that management was too conservative and held too much cash. They wanted NPK to pay a large dividend, buy back stock or make acquisitions NOW. Management resisted all these requests. Their reward was for the critics to take their complaints to the SEC and for the SEC to sue NPK. NPK fought the suit and lost so NPK appealed and won and the case was dismissed.
Throughout all this nonsense, NPK management had to put up with the distractions as well as the legal and accounting fees related to audits and changing accountants.
Now the company has reported record sales and earnings for 2007 and declared a total dividend of $4.25 per share.
I think that the Cohens and the rest of management deserves three cheers for perservering and doing the right things for the company and the shareholders. And the money grubbing, fast buck artists who did all the complaining can eat crow!
I agree. I first bought NPK in 1999 as a hedge against a Y2K calamity. The theory was that if the Y2K computer issue was as bad as some forecast, having stock in company that had a lot of cash was a good idea. It would be able to weather the storm and pick up Y2K-distressed companies at bargain prices. (Memo to the SEC: investors aren't stupid -- some of us think companies with cash and no debt are a good thing.)
Well Y2K was overblown, but after I received my first NPK annual report, I was sold on the company -- no BS -- just telling stockholders the unvarnished truth. At the time, NPK was just an appliance company, but the Cohens talked about getting (back) into a defense business to make the overall company less subject to the cyclical consumer economy. At some point they also talked about looking for other acquisitions (on their time table, not the SEC's) when the right one that was a good fit with NPK came along.
Their strategy has proven to be very good for the company. It's a triple-A company: Appliances, Ammo and Adult diapers! That diversity should allow it to weather any economic storm quite well.