Google Finance
Filing
Summery
Based on Q3 2008 (Dec. 31, 2007) data. Two business segment: Coil and Tubular. Down by housing market. Current price($6.30) below book value.
Facts:
1. Shares outstanding 6.77m.
2. Book value: 6.52.
3. Current ratio 3:1. No debt.
4. Ave earning for past 5 years: (0.91+0.90+0.83+0.33+0.19)/5 = 0.63.
5. Current dividend 0.24 rate pre year.
6. Recently insider sell quite a lot at $8+. One insider buy 1000 shares at $7.61.
Conclusion: Target buying price 0.63x9 = 5.67.
Updated: June 12, 2008
1. 15 years of paying dividend.
2. 37% of Float Held by Institutional & Mutual Fund Owners
3. No deficit in past 10 years. 2002, 2003 are their worst years. revenue around 100m compare to 180m in recent 3 years. Of course need to know whether they acquired something during that period.
4. According to Q3 2008 data, it had borrowed 5 million at Jan. 2008 to support working capital.
5. From Q1 2008 to Q3 2008, it has spent 4m on Capital Expenditures for new coil operation at Decatur Alabama. Totally they have spent 10m so far, and up to 16m could be spent on it. However, it says only 0.3m will be expected to spend on it in future. According to Q3 2007, the land price is 0.68m. According to 2007 annual, the land are 47.3 acre.
6. It is interesting to calc their land worth. In 2007 report, it owns (81.7 + 26.2 + 47.3) = 155.1 acres of land, and count as 1.08m in worth. If take the price of new Decatur land as the current price. It could worth 155.1 x (0.68/47.3) = 2.23m. Of course the price might not be the same for the three different land. But it should be more than 1.08m.
Nov. 14, 2014
2014 Q3 Data
Check list:
1.Major Business.
Steel coil and tubular manufacturer. It is founded by Mendel Friedman at 1939. Later his son Harold Friedman( retired at 2010) and Jack Friedman(retired at 2005) run the company.
2.Balance sheet.
Recent price is $7.90. Shares 6.8m. Market Cap around $54m. Tangible book value $9.38. No debt.
3.Credit facility.
Not important
4.Financial data by years.
5.Insider holding, options, Insider trading info, share buy back.
Insider holds very few shares. Jack Friedman has 360k under his name at 2010 and after that his name is not shown(he died at 2010).
6.Management compensation.
CEO Base salary is low($110k/year) but bonus varies from year to year($500k at 2009, $100k at 2014).
7.Employee numbers. Revenue/Employee. Compensation/Employee.
Currently have 100 employees.
8.Industry comparison.
9.Auditor
10.Major events.
11.Comments.
(1)It has been 6 years after I first wrote about the company. Its stock price went over $12 and now it is down below $8.
(2)It looks amazing to me that the company can remain profitable in downturn. Especially at 2010 when revenue was shrink by 2/3. One reason is the management is willing to cut bonus heavily at difficult time. The second reason is its revenue is tight with steel price which is actually pass through to customers. However, the volume still fluctuate quite a bit. Still it is a manufacturing company and suppose to have a fixed cost structure. I still do not understand how they can achieve this.
(3)During the past 10 years, the company's average income is $6.5m/year. Equity grown by $30m. Dividend payment around $29m in total. Around half of the earning has been paid out.
(4)Average EBITDA is $11m. Average CapX is $2.0m. Average Tax is $3.3m. Average real earning is about $5.7m. It is $0.3m below the average $6.3m income. Mainly because the average depreciation is $0.5m below the the CapX number.
(5)Given the book value is over current price. The company being profitable. The high dividend payout ratio. The average earning $5.7m/year. Current $54m market cap seems pretty cheap.
(6)The major risk is that the company's revenue is kind of unpredictable and fluctuate a lot. Also it relies on US steel which is both its biggest supplier and customer.
12.Links
http://www.oldschoolvalue.com/blog/stock-analysis/friedman-industries/
10.Major events.
11.Comments.
(1)It has been 6 years after I first wrote about the company. Its stock price went over $12 and now it is down below $8.
(2)It looks amazing to me that the company can remain profitable in downturn. Especially at 2010 when revenue was shrink by 2/3. One reason is the management is willing to cut bonus heavily at difficult time. The second reason is its revenue is tight with steel price which is actually pass through to customers. However, the volume still fluctuate quite a bit. Still it is a manufacturing company and suppose to have a fixed cost structure. I still do not understand how they can achieve this.
(3)During the past 10 years, the company's average income is $6.5m/year. Equity grown by $30m. Dividend payment around $29m in total. Around half of the earning has been paid out.
(4)Average EBITDA is $11m. Average CapX is $2.0m. Average Tax is $3.3m. Average real earning is about $5.7m. It is $0.3m below the average $6.3m income. Mainly because the average depreciation is $0.5m below the the CapX number.
(5)Given the book value is over current price. The company being profitable. The high dividend payout ratio. The average earning $5.7m/year. Current $54m market cap seems pretty cheap.
(6)The major risk is that the company's revenue is kind of unpredictable and fluctuate a lot. Also it relies on US steel which is both its biggest supplier and customer.
12.Links
http://www.oldschoolvalue.com/blog/stock-analysis/friedman-industries/
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