In weighing United-Guardian, you have to consider that it's very possibly a roach motel stock, and are you willing to take a risk like that with such a dink company (38 employees) and the concomitant thinly-traded stock.
Other than that, UG has a lot of positives. Tout follows (-g-):
Profitable every year past ten (as far back as my database goes).
Very profitable: 24% avg. net profit margin in past six years. (Its best years.)
Profitable now (as of May 12 anyway): "United-Guardian reports very strong first quarter sales and earnings". (And how many companies in this economy can report both earnings and sales being strong?)
u-g.com
"Mr. Globus (President of UG) pointed out that while it is difficult in this economic climate to project how the company will fare over the rest of the year, based on strong April sales the company is optimistic that it will weather the
current economic turmoil in better shape than many other companies. He also noted that the companycontinues to work on a number of new products that it hopes will enable it to continue to expand its salesin the coming years.
United-Guardian is a manufacturer of cosmetic ingredients, personal and health care products,
pharmaceuticals, and specialty industrial products."
The current p/e is 13. It's annual avg has ranged from 10-17 over the past ten years; most years over 14. No analysts have an earnings projection for UG for next year, according to what Yahoo provides.
Average roe over the past ten years has exceeded 20%. I'm guessing with a p/e of 13 and and roe of over 21% currently, the stock might qualify for inclusion in Greenblatt's Magic Formula list.
The d/e ratio is zero.
The p/bk number is over 3. That is high imo. Bv is increasing, but it's increasing at a slow rate. The p/sales ratio is also high. Which you would expect when profit margins on each sales dollar are so high.
The company pays a semi-annual dividend. The yield is currently .56/9.30 = 6%. Management has increased the dividend several times over the past decade.
Among the mutual funds that hold shares (per Yahoo) I see M. Whitman's EQ advisors had a small position in March.
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This stock is followed by Steve Felix on his "Dividend investing for retirement" thread.
I started a small exploratory position, and have now increased that to a small position. Imo, it's not a stock for traders; rather, for ltb&h. Large bid/ask spread and small buys/sells can jump this thing around. If times continue good for the company, stock may do okay. Otoh, if company hits an earnings decline or lawsuit or something else negative, just a few people heading for exits - and for sure there will be at least some - will collapse the stock. (imo) |
