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Strategies & Market Trends : Value Investing
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To: Mark Adams who wrote (12008)2/13/2001 11:47:56 PM
From: TimbaBear  Read Replies (2) of 78493
 
Regarding NPK and their cash levels. They have paid off all of their long term debt, so their cost of capital is probably minimal, since they can finance their own working capital requirements.

The Target information is contained in the 8K they filed on 2/6/01.

As far as putting the rest of the cash to work....well they have bought back some shares, and with this price drop, I suspect they'll buy back more.

One of the things that concerns me as a shareholder of any company is what the company does with it's cash reserves. If they can't reinvest the money and make more with it than I can, I'd like to see them send me a dividend. But I have seen too many companies go out and buy other businesses that turned out be just terrible wastes of perfectly good capital, so I'm never in any rush to force them to distribute capital(in the hopes that if they take their time a better decision will be the result).

For many years US companies have been moving away from dividends as an acceptable allocation of profits. I may be dreaming, but something is giving me the impression that they may start reversing that trend. I surely can't point to any evidence that I can think of, it's just a feeling. Probably something I ate! :~)

I've liked SFP for a while.

Timba
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