Margin of Safety Value Driven Ideas

slowly updating details on the potential ideas below.

The ideas were selected based on multiple value attributes. The categories for consideration were
Insider buying; share buybacks; debt reduction ; deep value discount to industry peers; large price underperformance; real estate;  dividends;  consistent above average  earnings; valuation discount based on enterprise value to EBIT, EBITDA,GP, and tangible assets ; growing book value and sales;, improving GM%

MFLX:Multi-Fineline Electronix, Inc. “provides  printed circuit and component assembly solutions to the electronics industry. The Company's services include design and application engineering, prototyping and high-volume manufacturing, and turnkey component assembly and testing”

MFLX value has been enhanced with a -45% price change over 52 weeks near 3 year low. It now trades at historical low valuation based on P/B. P/B is .79 near 10 year low of .80 versus 6 year average of 1.30, P/S .40 versus 5 year average of .70. and close to 3 year low of .40.  Margins have been on the decline but margins mean revert in this industry

Strong financial position and outsized industry under performance makes MFLX a micro cap value stock that is likely to mean revert. The most recently reported quarter 12/31/12 revenue increased by 21% to 289.7M.

MFLX Price on 04/22/13 = $14.02

Market Cap:357.87M ; Enterprise Value:256.44M
Price/Sales 0.40; Price/Book:0.77
Enterprise Value/Revenue:0.30 ; Enterprise Value/EBITDA:3.17
Qtrly Revenue Growth:21.00% ; Total Cash Per Share:3.90
52-Week Change:-44.73% ; Held by Insiders: 63.22%    



Price on 04/22/13 = $2.86

FMAOFMAO - Farmers & Merchants Bancorp is a regional bank founded in 1897 and based in Archbold Ohio. This OTCBB listed bank stock provides various financial services to individual and small businesses in northwest Ohio and northeast Indiana. It has 19 offices located in the Fulton, Williams, Henry, Defiance, Lucas, and Wood counties in Ohio; and 3 offices in DeKalb and Steuben counties in Indiana.
This conservative stock has slowly moved higher but is worth a look. Recognize that it’s trading close to 3 year highs for price and price to sales. It still trades a nice discount to book value. Current dividend yield is 3.80%.

FMAO: Price on 04/22/13 = $22.25 up from the previous day close of $21.55

Market Cap:103.53M; Enterprise Value:124.93M
Trailing P/E:10.68
Price/Sales: 2.78 ; Price/Book:0.94 ; Enterprise Value/Revenue:3.35
Qtrly Revenue Growth:2.20% ; 52-Week Change:3.97%   
The Bank owns all of its office locations, with the exception of Angola, Indiana. They own a total of 17 properties all on the books below fair market value. Above industry averages for ROA, Net Margins, ROE, Debt to Equity

HSON:Price on 04/22/13 = $3.35

OIIM:Price on 04/22/13 = $3.17

INTX :Price on 04/22/13 = $8.89

ELSE:Price on 04/22/13 = $4.38



thelouthebronx said...

INTX - Intersections
They provide identity theft protection and I believe it was BOA who just dropped them in order to refocus on their core services and reduce sales pressure on customers and employees.

I've run across it a few times but passed because I have no idea whether people still are interested in identity theft problems (or whether a large bank will cross-sell INTX's services).

ShadowStock said...

Thanks for the information!John