It sure looks that way to me. This would be a company that a Bain capital would jump on. With about $50 million, they could buy control of the company, steal the $80 million in cash, sell the inventory at a slight discount, collect the accounts receivables, sell off the plant and equipment, fire the workers and pocket about $200 million in a matter of months.
It's a rotten way to make a lot of money, but it happens. Check out the Bain story about what they are doing to Sensata auto parts right now. The company has posted record sales of $2.5 BILLION in 2 1/2 years, netted almost $800 MILLION after tax profit and each of the 200 employees have produced more than $3 Million NET profit in those 2 1/2 years. As a reward, Bain is closing the plant and moving it to China where they can hire workers who will work 7 days per week, 10 hours per day for less than $1.00 per hour.
Bain will save about $27k per employee, since the 200 non union employees in Freeport, Ill. made $17 per hour on average. Since they were non union, Bain is giving the employees NO SEVERANCE package whatsoever and the city of Freeport and the surrounding area will be devastated. We will all be subsidizing Bain's greed by paying for unemployment benefits for the laid off employees and will be subsidizing much of their health care costs since they will no longer have health insurance and area hospitals will be writing off millions of dollars in uncollectible medical bills which would have been paid by Sensata's employee health insurance.
A corporate raider such as Bain could take over SPU,because they could well be a take over target considering the cash on hand, low debt, and the far undervalued stock price, but hopefully that won't happen in the near future.
Target price is $4.00/share and volume is just starting to pick up. Very strong financials and fundamentals and no downside in my opinion. This is a solid Company with good government support! Look at cash position. Move into orange juice products is very smart. Huge demand in China.