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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (55210)	4/22/2015 7:12:28 PM
From: geoffrey Wren	Read Replies (1) \| Respond to of 78748

IEHC? I could not find a detailed discussion of what they do in the 10Q. Yahoo reports this: IEH Corporation designs, develops, and manufactures printed circuit connectors for high performance applications. Its products include standard printed circuit board connectors, circular connectors, connector cable assemblies, high density connectors, and plastic circular connectors, which are used as basic components of larger assemblies of finished goods. The company markets its products directly to original equipment manufacturers, as well as through authorized representatives and distributors primarily to government, military, aerospace, medical, automotive, industrial, test equipment, and commercial electronics markets. IEH Corporation markets its products in the United States, Canada, Israel, India, various Pacific Rim countries, South Korea, and the European Union. The company was formerly known as Industrial Heat Treating Company, Inc. and changed its name to IEH Corporation in March 1989. IEH Corporation was founded in 1937 and is based in Brooklyn, New York. While the numbers look pretty good, this business seems subject to competition. There is no moat to this kind of business. I am not sure why they have been able to do so well to now, but I'd like to understand if they will continue to do so. There was this bit in the 10Q that raises concerns: The Company has a collective bargaining multi-employer pension plan (“Multi-Employer Plan”) with the United Auto Workers of America, Local 259 (“UAW”). Contributions are made by the Company in accordance with a negotiated labor contract and are based on the number of covered employees employed per month. With the passage of the Multi-Employer Pension Plan Amendment Act of 1990 (the “1990 Act”), the Company may become subject to liabilities in excess of contributions made under the collective bargaining agreement. Generally, these are contingent upon termination, withdrawal, or partial withdrawal from the Multi-Employer Plan. [Par.] The Company has not taken any action to terminate, withdraw or partially withdraw from the Multi-Employer Plan, nor does it intend to do so in the future. Under the 1990 Act, liabilities would be based upon the Company’s proportional share of the Multi-Employer Plan’s unfunded vested benefits which is currently not available. The amount of accumulated benefits and net assets of such Plan also is not currently available to the Company. The total contributions charged to operations under the provisions of the Multi-Employer Plan were $93,266 for the nine months ended December 26, 2014 and $80,726 for the nine months ended December 27, 2013. One concern is simply the exposure on the pension. The second is this suggests they have a workforce under UAW union membership. I am disinclined to invest in a business with a union workforce, especially UAW. My 2 cents on it. I'll keep looking.