Analysis on May 11th, 2007:
PMFG's brief technical & fundamental analysis:
Boy, was I wrong to be bearish on this one ... fundamentals improved dramatically over the last few quarters:
• Peerless Mfg. Co. Reports First Quarter Fiscal Year 2008 Financial Results (http://biz.yahoo.com/prnews/071106/latu099.html?.v=101)
PR Newswire (Tue, Nov 6)
I find the following part especially interesting:
«The
Environmental Systems segment revenues for the first quarter of fiscal year 2008 were $16.3 million, an increase of $11.7 million compared to revenues of $4.6 million for the first quarter of fiscal year 2007. The Environmental Systems segment operating income was $4.6 million for the first quarter of fiscal year 2008, an increase of $3.7 million, compared to an operating income of $932,000 for the first quarter of fiscal year 2007.»
I would like to learn more about this "Environmental Systems" segment. On the other hand, the company made $0.52 EPS for the quarter, so it looks cheap on an earnings multiple comparison (it looked expensive when I made the initial analysis - I've been learning that when stocks have rich multiples, many times that's for a good reason and the opposite is usually also true - so it pays to investigate
why stocks are "cheap" and
why they are "expensive").
After 74 years of history and at least 27 years in the stock market it seems the time has finally come for PMFG, look at the following long term chart:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=42153;image)
I wish I've seen it earlier ... anyway, I believe the company's business description on Yahoo Finance (http://finance.yahoo.com/q/pr?s=PMFG) and the latest earnings release (http://biz.yahoo.com/prnews/071106/latu099.html?.v=101) fully explain the huge advance.
The latest two quarters were particularly strong, with Q2 EPS of $0.63 and Q3 EPS of $0.52 (there's positive seasonality in Q2, but not in Q3). Annualizing this I get $2.30 EPS for a full year, so with the stock at $35.5, it is trading at about 15.4 times earnings while it grew them about 7 fold from the year ago levels.
It appears PMFG is still a valid long term investment idea, here at a $233 M market cap. It's a pity the stock almost has no volume, just 2,700 shares traded so far today.
I'm enthusiastic about PMFG's business, just one thing holds me back. This S-8 form showing 16% dilution (http://www.sec.gov/Archives/edgar/data/76954/000095013407024357/d51758sv8.htm) for director's compensation. It's too much ...
After a correction to the 200 days SMA, PMFG is jumping higher again, approaching its all time high set at $41.64.
What's happening in phase 1 on the chart below? Were there any news out?
I don't see any recent news ... it looks like people support this company because its business is connected with the defense of the environment.
It's a pity volume is very low, just 31,700 shares traded yesterday.