Just went back and looked at the Barron's article from Nov. 8, 2014. Excerpt:
Weak European markets have led investors to bail on shares of OM Group. The maker of industrial-use magnets, batteries, and specialty chemicals, which caters to the automotive, aerospace, and medical-device industries, draws more than half its revenue from Europe.
OM’s stock (ticker: OMG) has plunged nearly 30% this year. While we’re not calling for a rebound in Europe, at $26.60, the shares look compelling, and could have a lot of upside.
Profitability may benefit from cost-cutting. More importantly, with about $3.50 a share in net cash on the balance sheet, and an expected free cash flow yield of 10%, much depends on how management allocates its capital.
Management has been returning cash through dividends and stock buybacks, but the level may be too conservative for some investors. The situation could attract an activist.
The shares are cheap, trading for an enterprise value of six times estimated 2015 earnings before interest, taxes, depreciation, and amortization (Ebitda). Chris Kapsch, who covers OM Group for Topeka Capital Markets, puts fair value 25% higher at $33, based on 7.5 to 8 times estimated Ebitda.
The "Sizing Up Small Caps" column has a nice article on Raven this week. I posted the entire article at the IV message board, but here is an excerpt from the story.
IN THE PLASTIC-SHEETING business, oil-and-gas customers account for about 35% of sales. Raven also supplies sheeting and coverings to other industries, and to agricultural customers. That business, which has been strong, will help to offset the weakness on the oil-and-gas side, potentially leading to flat division revenue for the year.
Raven’s participation in Google’s Project Loon could be a big opportunity that isn’t getting adequate credit from investors. Dougherty’s James says there is a 70% chance that Google will proceed with the project, perhaps by next year, which could mean orders for tens of thousands of balloons. James estimates Project Loon could generate $50 million to $100 million in annual revenue for Raven, and be worth between $4 and $8 to the stock. Raven has no competition in its ballooning business.
Raven management is on the hunt for acquisitions, and has plenty of financial flexibility to make a deal. Maintaining the dividend is also a priority; the company has paid one for 42 consecutive years.
While Raven’s business is cyclical, the company shouldn’t be dismissed. When markets turn up, the company’s shares are apt to take flight.
Was just looking at some of the officers options positions. I see that Rykhus has about 400,000 options and most of them are under water. 110,000 of them expire this year and are priced at $15.49 and $22.20. Most of his others (expiration dates next year or later) are priced at $30 or better, so I would assume he would like to see the share price go up also.
Wonder if they have something cooking. $50M in cash already on the balance sheet.
SIOUX FALLS, S.D., April 16, 2015 (GLOBE NEWSWIRE) -- Raven Industries, Inc. (RAVN) announced today that it has entered into a new five-year $125 million senior unsecured multi-currency revolving credit facility.
"This new revolving facility provides us with additional flexibility to execute our long-term strategy and pursue strategic acquisitions in the future," said Steven Brazones, Vice President and CFO. "We are pleased to have access to committed financing at very attractive rates and look forward to capitalizing on opportunities to further enhance our competitive positioning and accelerate growth, particularly within our Applied Technology and Aerostar divisions."
Well, revenues were much worse than the $84 million estimate Yahoo was showing coming in at $70 million. That's a huge drop from last year's $102 million. Earnings were a little better than expected. I am somewhat more hopeful for their end markets in ag and energy than they are. I think the bottom may be in for energy prices and grain prices. Could still take a while for their businesses to recover though.
OK, this is a real post. Looks like EMR is borrowing $1B for 6 and 10 years at 2.6% and 3.1%. Makes sense if they have a good use for the money. Heck, the dividend is more than that at 3.2% currently.
I looked at this a few months ago when Barron's had a favorable article. Didn't look cheap enough at the time, but I guess someone thought it was.
CLEVELAND, NEW YORK and WEST PALM BEACH, Fla., June 1, 2015 /PRNewswire/ -- OM Group, Inc. (OMG), a technology-driven diversified industrial company, today announced that it has entered into a definitive agreement to be acquired by funds managed by affiliates of Apollo Global Management, LLC (APO) (together with its consolidated subsidiaries, "Apollo", and such funds, collectively, the "Apollo Funds"), for $34.00 per share in cash. The purchase price represents a premium of approximately 28% over OM Group's closing share price on May 29, 2015.
German chemicals group BASF SE (BASFn.DE) is considering a potential offer for Syngenta AG (SYNN.VX), the Swiss peer that has received a $45 billion takeover offer from Monsanto Co (MON.N), people familiar with the matter said on Wednesday.
BASF is speaking to investment bankers about the possibility of an offer for Syngenta, through it has made no decision and no bid may materialize, the people said, asking not to be identified because the deliberations are confidential.
Syngenta has so far spurned Monsanto's overtures citing antitrust hurdles, though lawyers representing the two companies met last week in New York to discuss whether the regulatory obstacles can be overcome, a separate source said. A BASF bid for Syngenta would also likely face significant antitrust issues.
The funds have until Aug. 15 to file their 13F reports for Q2 which ended on June 30. They have 45 days after the end of the quarter.
I'm not sure what to make of it either. Vintage Albany Acquisition, LLC (Brian Kahn) owns 40% of it and Steel Partners owns 20%, so maybe they have enough pull to assure the lenders.
Emerson Electric • EMR-NYSE
Hold • Price $58.40 on May 5
by Canaccord Genuity
The maker of machinery and instrumentation for a variety of industrial and consumer applications had a difficult quarter, as energy-related activity declined much faster than expected. Foreign-exchange dynamics also continued to present significant year-over-year head winds, and several other end-markets (telecom, residential cooling) will likely stay weaker near-term. Management now expects underlying sales growth in fiscal 2015 in the range of 0% to 2% (from a 3%-to-5% range), with reported sales down 5% to 7% (including reductions from a divestiture and forex). EPS is forecast in the range of $4.17 to $4.32 (down from $4.50 to $4.60).
While our rating stays at Hold, our 12-month price target drops to $62 (from $65) or about 9.6 times our fiscal 2016 adjusted Ebitda estimate of $4.75 billion.
OK, it's impossible to know how closely this relates to actual product sales, but when I search Twitter for the topic "Hurco", it brings up lots of pictures and tweets from machine shop owners bragging about their new Hurco machines. Hope it means something for future earnings.
Hi Skip. I found a 13 G/A filing from Jan. 13, 2010 that showed Moquist owning just under the 5% limit with the box for that checked. There were a few Form 4s filed after that, but I think after he left the company his holdings were under the 5% level requiring filings. Would be interesting to know if he still holds some and whether he has much in the way of conversations with current management.
Sioux Falls, SD (June 1, 2015) — Raven Industries (NASDAQ: RAVN) has been awarded a firm-fixed price (FFP) contract through the Naval Air Warfare Center Aircraft Division Lakehurst, N.J. for the procurement of Exportable Persistent Ground Surveillance Systems (EPGSS), spare equipment and technical support. The tethered aerostat contract was awarded for approximately $6 million and is expected to be delivered over the next 12 months.
“Raven Aerostar is proud to support past and present efforts protecting and defending U.S. and Coalition forces. Whether it’s with our tethered aerostat systems, Vista Radars or stratospheric balloons, we have the unique ability to deliver affordable persistent solutions at any altitude,” explains Lon Stroschein, Raven Aerostar Vice President and General Manager.
About as expected. Decent revenues, but as usual, no improvement on the earnings. Backlog was positive. Dividend is nice, but I don't see much prospect for improved share price until they can increase profits. It's selling at about a 20x PE which is fairly high for no growth. No disaster, but not a compelling investment except for the dividend. Will they continue to pay out 90% of reported earnings as dividends?