USTR
Cary, USTR was reiterated BUY last week by Credit Lyonnais
with a 12-month target price is $37.00 per share. Also, one
of the other firms covering the stock raised their rating
from BUY to STRONG BUY.
I copied and pasted institutional ownership at the bottom of
this post, but first, USTR was recently featured in the WSJ.
I think that you'll agree with the last sentence <ggg>:
<INVESTORS seem to be running for cover these days as
economic indicators spill out of Washington, flooding the Street
with warnings of imminent inflation and possible interest rate
hikes. Even Friday's surprisingly modest payroll-growth numbers
may not be enough to stave off higher rates, though the news seemed to grant Wall Street at least a one-day reprieve.
But make no mistake: the markets are jittery. That's why we've devoted today's screen to a cyclical value play -- a company
whose fortunes aren't tied to the latest technological fad or
the whims of day traders. It's axiomatic that a cyclical value company is usually in a pretty unexciting business. But you
don't have to run the company, just own its stock. And the
truth is, United Stationers (USTR) is too much of a bargain to ignore.
Since its incorporation in 1922, the company has gone from a
catalog and retail operator to the nation's largest wholesale distributor of traditional office products, computer supplies,
office furniture and facilities-management products. The
company offers 35,000 items from more than 500 manufacturers,
and its customers include more than 20,000 dealers. With a
network of 65 regional distribution centers, United Stationers provides next-day service to all the nation's major metropolitan areas.
Since the end of March, the Russell 2000 index of small-capitalization stocks has jumped 14%, while the large-cap
S&P 500 index has risen a scant 2.6%. But most small-cap cyclicals like United Stationers are still at enticingly low valuations.
The company currently trades at a P/E of almost eight times
expected year-2000 earnings.
"Even at its peak, United Stationers was cheap," says Credit
Lyonnais Securities analyst Jeff Evans, one of six analysts
with a Buy rating on the stock. The company may not represent
the "fads and fashions" of the market (i.e. it doesn't have a
dot.com in its name), but it has been a consistent performer
that offers solid value. While United Stationers is sensitive
to economic cycles, "it is not as cyclical as paper and steel,"
says Evans.
The company has suffered from the misperception that wholesale
is an obsolete business, says Evans. While the Internet has
replaced the need for the middleman in many industries, office-products wholesalers "aren't going away."
It may make sense for clothing retailers to bypass the wholesaler
and order directly from the manufacturer, because clothing
companies can mark up their items enough to offset shipping
costs. However, in the case of office products, where each
pen may be worth only 10 cents to 20 cents, explains Evans,
"shipping costs are very large relative to the value of the merchandise." As a wholesaler, United Stationers can save on
costs because it aggregates demand from all the "Joe and Mary stationers" and buys in bulk from the manufacturer.
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114 Institutions hold 68.21% of the outstanding shares as of March 31,1999. Of these, 23 established new positions while 36 liquidated their holdings. Overall, Institutions decreased their holdings by <7.34>% for the period.
Top Ten Institutional Shareholders (* denotes new position)
Rank Institution Shares Previous Net % %
Held Chng. Chng. Owned
1 Neuberger & Berman 2,027,400 1,464,800 +562,600 +38.4% 5.5%
2 Maverick Capital 1,845,000 1,018,000 +827,000 +81.2% 5.0%
3 SAFECO Asset 1,832,500 1,932,500 -100,000 -5.2% 4.9%
4 Farallon Capital 1,634,700 826,700 +808,000 +97.7% 4.4%
5 Barclays Global 1,154,725 1,020,936 +133,789 +13.1% 3.1%
6 Thomson Horstmann 985,700 935,000 +50,700 +5.4% 2.7%
7 Cramer Rosenthal 888,176 1,049,426 -161,250 -15.4% 2.4%
8 T. Rowe Price 751,200 770,900 -19,700 -2.6% 2.0%
9 BlackRock, Inc. 663,500 582,200 +81,300 +14.0% 1.8%
10 Smith Barney 645,968 832,944 -186,976 -22.5% 1.7%
Top Ten Totals: 12,428,869 10,433,406 +1,995,463 +19.1% 33.4% |
