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MOD-PAC CORP. Message Board

  • maturadoratum maturadoratum Jan 21, 2011 1:42 PM Flag


    MPAC now trades for nearly two weeks significantly above the $5-mark. This will likely head towards $6 before earnings are announced. 2-year-chart looks great!

    Although the Q4 will be the first quarter of nearly fully taxed earnings after the company has applied all loss carryforwards, there are some aspects like debt reduction and share repurchases that let me believe that earnings per share will be at the level of last years Q4. This would equal annual earnings of $0.60-$0.70 a share! Thus, PE is far below 10. Book value is at $7. A no-brainer below $6? I think yes.

    From the latest earnings release (Q3 2010):

    "The Company's effective tax rate for the third quarter of 2010 was 0.4% as a result of federal and state minimum taxes. The Company has approximately $0.1 million in net operating loss carry forwards that can be applied to future income."


    "Cash and cash equivalents were $2.24 million at October 2, 2010, a significant increase from $0.32 million at October 3, 2009, but down from the 2009 year-end balance of $3.78 million. The decrease through the first nine months of 2010 was primarily the result of capital expenditures, increased working capital requirements, particularly with inventory, a reduction in long-term debt and the repurchase of stock."


    "The Company repurchased 53,970 shares in the third quarter of 2010 at an average price of $4.23. MOD-PAC has authorization to repurchase up to an additional 196,532 shares."

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    • I wish I had bought more at $1.67, when I first got in. Unfortunately, I was unwilling to sell other holdings at a loss... so I only had so much to spend.

      Over time, I have analyzed and re-analyzed this holding. Every time I look at the numbers, I buy more shares. MPAC should easily be at $7.50, today.

      This will become obvious between now and 4Q12, when I believe the shares will settle somewhere between $10 and $12. Naturally, a lot can happen between now and then... but I can sleep well at night, in the interim, without worrying about my MPAC.

      My thanks to management for the sound judgment and rational thinking that give me comfort as a shareholder. If any of you need to sell for personal reasons, you know how to reach me.

9.22+0.06(+0.66%)Sep 30 4:00 PMEDT

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