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Friedman Industries, Incorporated Message Board

  • stocktawk1 stocktawk1 Jun 27, 2008 11:28 AM Flag

    Break out

    Going to $10+? High steel prices. Money going into commodities with dollar so low. Tariff ruling in favor of American steel helps too: http://biz.yahoo.com/ap/080620/china_steel.html

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    • You first.

    • "I'm an investor. Not an insider. Not a speculator. Just an investor well trained in finance.

      FRD is a great company. The most solid balance sheet you can find.

      However, the speculators here (easy to identify by their use of profanity) don't grasp any real information.

      For instance, the new plant is a COIL plant yet coil is the slim and shrinking margin half of the business. Will the efficiencies of a new plant outweigh the additional depreciation of the new plant?

      It's become apparent FRD is not going to be a buyout candidate for the forseeable future.

      The dividend bounces up and down based on net profit while the risks to the business are always substantial.

      Insiders are not buying stock and options are not being issued. That is a clear reflection of overpricing.

      It's rather pathetic that momentum and liquidity seem to be the only factors affecting stock price and stock picking."

      Are you investor in this great company? If you think you are well trained in finance, you have offered nothing from a financial fundamental and/or technical analysis of the company. What makes you think you know it all? Why don't you provide us with a solid financial analysis of this company and determine what you think this company's share price should be?

      Or are you just going to continue to bash the company and pretend you are the king of finance?

    • I'm an investor. Not an insider. Not a speculator. Just an investor well trained in finance.

      FRD is a great company. The most solid balance sheet you can find.

      However, the speculators here (easy to identify by their use of profanity) don't grasp any real information.

      For instance, the new plant is a COIL plant yet coil is the slim and shrinking margin half of the business. Will the efficiencies of a new plant outweigh the additional depreciation of the new plant?

      It's become apparent FRD is not going to be a buyout candidate for the forseeable future.

      The dividend bounces up and down based on net profit while the risks to the business are always substantial.

      Insiders are not buying stock and options are not being issued. That is a clear reflection of overpricing.

      It's rather pathetic that momentum and liquidity seem to be the only factors affecting stock price and stock picking.

    • You seem to have left out some other pertinent information, short SEEleR2.

      "During the three months ended June 30, 2008, the Company maintained assets and liabilities at levels it believed were commensurate with operations. Cash and cash equivalents was generated primarily from earnings and from a substantial decline in inventory and was used to pay off long-term debt(from 6.67 Million to 54 Thousand!) and pay down accounts payable (from 13.5 Million to 10.7 Million)"

      "During the quarter ended June 30, 2008, the Company purchased approximately $1,147,000 in fixed assets. These assets were related primarily to equipment associated with the new coil operation in Decatur, Alabama, which is expected to be in production in August 2008. In connection with this new operation, the Company phased out its coil processing facility in Lone Star, Texas in the 2006 quarter and redeployed certain of these assets to this new coil facility. At the Decatur processing facility, the Company will operate a steel temper mill and a steel cut-to-length line including a leveling line."

      Lets see.......Long term debt down = good, Accounts payable reduced = good, Assets that have been idled that will be put back into action generating additional cash = good, new assets that will be put into action generating more cash = good, steel sector beaten to death that will soon recover = good, a 25% increase in retained earnings compared to last quarter = good.

      A Jacka$$ that constantly whines = bad. Enough said.

    • Hate to admit it folks, but seer is right on this issue. Don't expect fabulous numbers like this again - at least for some time.

      We might see a nice dividend payout anouncement shortly and that could help SP. The 10Q stated they had adaquate liquidity to avoid borrowing against their credit facility -not sure if that includes cash that could pay a special dividend or not. Management is conservative and will max out dividend before the end of the year (avoid tax increases under Democratic rule) - if cash is available.
      Unfortunately, with margin contraction and a new plant starting operations, GAAP earnings will suffer and working capital needs may make a special dividend impossible. Only savior might be increased selling prices but that's just a pipe dream (pun intended).

    • Idiots are people who can't read a 10Q.

      "During the three months ended June 30, 2008, sales, costs of goods sold and gross profit increased $9,068,186, $4,773,061 and $4,295,125, respectively, from the comparable amounts recorded during the three months ended June 30, 2007. The sales increase was primarily related to an increase in the average selling price which increased from approximately $643 per ton in the 2007 quarter to approximately $781 per ton in the 2008 quarter. In the 2007 quarter, the Company sold approximately 79,000 tons compared to approximately 76,000 tons in the 2008 quarter. The increase in costs of goods sold was primarily related to an increase in the average per ton cost of goods which increased from approximately $595 per ton in the 2007 quarter to $675 per ton in the 2008 quarter. The increase in gross profit in the 2008 quarter was primarily related to substantially improved margins earned on sales, primarily pipe product sales. Gross profit as a percentage of sales increased from approximately 7.5% in the 2007 quarter to 13.5% in the 2008 quarter. The Company experienced strong demand for its pipe products in the 2008 quarter and margins improved significantly. In addition, the Company benefited from lower cost inventory sold at substantially improved selling prices. As inventory is replaced with higher material cost, the Company expects a reduction in margins earned on the sale of pipe products."

      "Coil product segment sales increased approximately $4,931,000 during the 2008 quarter. This increase resulted primarily from an increase in the average per ton selling price which increased from approximately $676 per ton in the 2007 quarter to $841 per ton in the 2008 quarter. The Company sold approximately 31,000 tons in each of the quarters. Coil operating profit as a percentage of coil segment sales decreased from approximately 4.4% in the 2007 quarter to 2.2% in the 2008 quarter. During the 2008 quarter, the Company incurred a significant increase in cost of coil products. Average per ton cost increased from approximately $634 per ton in the 2007 quarter to $811 per ton in the 2008 quarter. The Company was unable to pass all of this increased cost to its customers in the 2008 quarter."

      The larger revenue is due to higher prices. The larger profit is related to a huge reduction in inventory as they used up all their cheap inventory, particularly in pipe. In spite of that, total sales tonnage declined again from the year ago quarter as it has regularly now for a few quarters. The coil raw materials cost has increased to the point the increase can't be passed along to their customers.

      Presumably, they expect to start the new plant in August and they will then be depreciating that too.

      So, between high cost raw materials replacement, price inflexibility in coil and the additional depreciation of almost $10 million in PPE, this is the last rosy quarter for a while.

      Have any intelligent comments to make in response?

    • I own you!

      But, talking stock - do you understand why the earnings are up this quarter and will be down (a lot) next?

    • Seer has a bad attitude because he is always on the sidelines when everyone else is making money. He has been waiting for the pps to reach $3 for several years.

    • "Going to $10+?"

      Sheer genius!

      Nope, just a pump and dumper.

    • The company just raised there dividend and they have great earnings. There stock price is way to cheap for such a healthy company.

      • 1 Reply to BaysidePlayer
      • Giving you the benefit of the doubt, perhaps your analytical skills are better than your
        grammar, explain your position in more detail. For instance, how does the just reported
        quarter differ from the same quarter the year previously in net sales, earnings and
        tonnage? Can you explain the material anomaly in the balance sheet? Can you spot the
        huge disclosure difference in the annual report and discuss the implications for the stock
        price?

        Or are you just a pump and dumper?

 
FRD
7.94+0.03(+0.38%)Sep 30 4:00 PMEDT

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