Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| Marine
Products (MPX) Looks Poised to Rebound |
Published: January 18, 2006
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Marine Products Corp. (MPX)
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Marine
Products (MPX)
Sector = Consumer Goods
Industry = Recreational Vehicles
Market Cap. = $400 million
Enterprise Value = $370 million
2004 Revenues = $252.4 million
2004 Gross Profit = $65.6 million
2004 Revenue Growth = +30.1%
Insider Ownership = 68.7%
Institutional Ownership = 22.9%
Insider Activity (ttm) = Neutral
Enterprise Value/EBITDA = 9.0 |
Marine is a well-known
manufacturer of recreational boats marketed under the Chaparral brand
name. The company's products range from modest 18-foot deck boats priced
for less than $20,000 to luxurious 37-foot cabin cruisers worth nearly
$300,000. Additionally, the firm sells a complete line of salt-water
sport-fishing boats. Marine's boats can be found at more than 160
authorized dealerships nationwide, as well as through a network of more
than 25 international boat dealers.
MPX was pummeled several months ago when the company warned that an
uncertain retail environment -- particularly for its smaller model deck
boats -- might leave its fourth-quarter numbers a little light. The
cautious outlook weighed heavily on the shares, which have since traded
within a narrow $1 range between $10 and $11 -- about half of where they
were last February. Of course, after doubling for three consecutive
years between 2002 and 2004, it's not surprising that the stock has
stopped temporarily to catch its breath.
Even after the pullback, MPX has still delivered gains of better than
+30% annually over the past three years -- about ten percentage points
ahead of the average stock in the recreation industry. While the markets
may have overreacted to Marine's recent setbacks, it is precisely such
knee-jerk, myopic selling that allows value investors an opportunity to
purchase quality stocks at discounted prices.
As the table below shows, Marine has delivered attractive top and
bottom-line growth rates over the last five years. This has fueled
stellar stock performance, as well as steadily rising dividend payments:
| Year |
2001 |
2002 |
2003 |
2004 |
TTM |
| Revenues |
$134.7M |
$162.7M |
$194.0M |
$252.4M |
$277.9M |
| Net
Income |
$8.6M |
$12.4M |
$18.1M |
$23.7M |
$27.5M |
| EPS |
$0.22 |
$0.32 |
$0.47 |
$0.58 |
$0.67 |
| Free
Cash Flow |
$4.8M |
$7.9M |
$14.1M |
$26.6M |
$20.8M |
| Dividends
Per Share |
$0.01 |
$0.04 |
$0.07 |
$0.11 |
$0.16 |
Despite a weaker fourth-quarter
outlook, the company is still on track to post full-year earnings of
$0.66 per share, which would represent an impressive +14% improvement
over last year's total. Through the first three quarters of 2005,
revenues climbed +13.4% to $215.2 million, thanks in part to higher
selling prices per unit. At the same time, net income jumped more than
+20% to reach $22.0 million, or $0.54 per share.
It is worth noting that management has a sizeable stake in the company,
with insiders holding more than two-thirds of the firm's outstanding
shares. And with management's and shareholders' interests aligned, it is
not surprising to see that the company has done a remarkable job of
putting its capital to work, with excellent return on equity (ROE) and
return on asset (ROA) figures of 31.1% and 24.2%, respectively. Both
figures handily beat industry rivals, and are also well ahead of the
firm's own 5-year historical average.
In my book, any management team that can consistently generate such high
returns on capital is worthy of consideration. The firm's rising free
cash flows are also a major positive. After losing nearly one-third of
its value over the past year, the stock now has a solid operating cash
flow yield (calculated by taking operating cash flow and dividing that
figure by the firm's enterprise value -- OCF/EV) of 5.8%.
In the short term, Marine may stumble slightly over the next few months
as the company slows production to assess dealer inventory levels,
customer demand, and the impact of rising gas prices. However, with a
successful forty-year track record, an experienced management team, and
a premium brand name, the company will weather this storm. In the
meantime, the firm is introducing nine new models in 2006. And based on
early feedback, these models have been well received by dealers and
customers alike. Furthermore, replacement orders from owners whose boats
were destroyed by recent hurricanes should also boost results in the
coming year.
If a rising tide lifts all boats, then it should surely lift a premier
boat manufacturer like Marine.
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Important Note:
The above article was merely a small excerpt from a recent issue we sent
to subscribers of our premium value investing service -- Half-Priced
Stocks. The mission of Half-Priced
Stocks is to help our readers identify securities that are
trading at the steepest discount to their intrinsic net worth. In some
cases this discount can reach up to 50% or more, giving savvy value
investors the chance to purchase quality stocks for just pennies on the
dollar. To receive your
copy of our most recent issue of Half-Priced
Stocks, as well as other guidance similar to this twice per
month, you'll need to subscribe to this publication. To learn more,
please visit:
https://web.streetauthority.com/subscribe-hps.asp
Thanks for reading!
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Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
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