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National Presto Industries Inc. Message Board

  • biblioguy biblioguy Mar 28, 2000 9:15 PM Flag

    don't faint, but...

    I just read the 10K, which was released today,
    and as of 2/29/00, NPK had 7,209,606 shares
    outstanding!!! This means that the company has bought back well
    over 100,000 shares of stock lately!!! According to
    the 10K, NPK bought back 155,000 shares in 1999.
    Let's hope the stock price stays low so that they can
    continue to buy back shares. The current buyback
    authorization is for 750,000 shares total (including those
    repurchased last year).

    The 10K also indicated that
    Maryjo has given up the CFO post. As of November 1999,
    Randy Lieble, a long-time employee, is the
    CFO.

    I talked to Maryjo last Friday, and despite the
    impending release of the 10K, she wouldn't comment on the
    buyback situation when I asked her about it. She did tell
    me to expect an announcement on this year's new
    products by mid-June. According to Valueline, several new
    products are in the works for this year.

    Let's hope
    the buyback continues!!!

    Biblioguy

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    • Where are these numberss coming from. If you are
      anlyzing the cash flows please show me your calculations.
      Over 1/2 of their cash flow comes from investment
      income which is the interest they are recieving on their
      cash. Theirfor if the paid out all off their cash the y
      would report 1/2 of the earning sthey report now.

    • Your position in NPK is undoubtedly underwater.
      It hardly matters if your lastest purchase (as you
      claim) is in the money.

      Since you have very low
      expectations as an investor, you probably should consider
      bonds rather than stocks.

      A credit analyst
      would find NPK appealing because its operations will
      produce the necessary EBITDA to cover interest expenses
      far into the future. The company is prepared to
      support at least $100 million of debt.

      Meanwhile,
      equity analysts ignore this company because its growth
      prospects are minimal, at best. Rational stock buyers
      aren't interested in no-growth companies unless there is
      a compelling story to spark interest. A large stock
      buyback, going private, getting taken over, or a huge
      special dividend are events that might catch a lot of
      interest.

      If you have been a patient long-term
      investor in NPK, then you have received miserable returns
      in the biggest bull market in history. To defend the
      poor stock market performance of this company and
      ignore its prospects is to admit that your motives are
      emotional and not based on any rational investing
      principle.

    • Can give shareholders bonds - return of capital.

      Then sell themselves to Salton. Or Global Tech.


      I can get a higher ROIC doing something else.



      Sam

    • You look foolish by saying that WalMart would even consider buying NPK. WalMart has never been in the production business. Do your research--this company would have to be bought by someone else.

    • Sorry for the error. Using T's machine an forgot my I.D. would not show.
      Anyways, terybil loves NPK (and the NPK crew) too, so no harm done there.
      .....mark_ets .....

    • I too read that part of the 10-K. And the sad
      truth is even more apparent now than before. Even
      though a very limited buyback is occurring, it has not
      lifted the stock price. It would be bad enough to watch
      the stock price drop with no buyback in place. But to
      see the price tumble as far as it has while the
      company has been repurchasing a few shares shows how
      little regard Wall Street has for this
      issue.

      Obviously Wall Street is a barometer of sentiment and real
      opportunities are often overlooked. But analysts understand the
      impact of corporate policies and practices. In other
      words, sometimes Wall Street gets it right. And in this
      case the Street has it right.

      Did you also
      notice that NPK posted earnings from interest income of
      about $9.4 million? And total earnings were around $20
      million, if I recall correctly. The buybacks cost about $5
      million. And the 10-K stated that repurchased shares were
      used for stock option plans. In other words, the stock
      NPK repurchased will eventually be sold back into the
      market when employees receive the shares through option
      awards. Some buyback!

      The point of stock buybacks
      is to reduce the shares outstanding permanently!
      Creating an inventory of shares to be reissued to
      employees is nothing of the sort. And who knows what will
      happen to the strike price of the employee options if
      the market price of NPK stock remains at such
      depressingly low levels. All too often companies reissue
      options at a price that makes it profitable for the
      employees to sell. And the cost of the price difference is
      always dumped on the existing shareholders who do not
      receive this perk.

      The buyback authorization
      might be for 750,000 shares. Big deal! At the current
      rate, we've got four years to go before this buyback is
      completed, based on the pace of repurchases. If the latest
      year is an example, the stock price, at best, will
      hover around the book-value-per-share level. That means
      the price MIGHT stand still for the next four years.
      Given the amount of the dividend and the fact that
      repurchases are occurring at or somewhat above book value,
      you can calculate that book-value-per-share will stay
      close to its current level. That's not going to excite
      investors and lead to a higher stock price. And of course,
      if the stock price rises a few dollars per share,
      the buybacks will probably be suspended. There is
      most certainly an internal limit on the price NPK will
      pay to reacquire its own shares.

      New
      products?! How about old products. I was in Costco the other
      day, and I made an effort to look for NPK products
      while there. I couldn't find any. Is Costco a seller of
      NPK products? I don't know. But the store was jammed
      and if NPK is not selling though Costco, an
      opportunity has been lost.

      New products?! The
      Brooklyn Bridge was built faster than NPK rolls out new
      products. Mid-June for an announcement! How embarassing. If
      our current economy can be characterized by anything,
      a surge of new and improved products has been
      central to our prosperity.

 
NPK
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