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

To: geoffrey Wren who wrote (55222)	4/22/2015 8:30:54 PM
From: E_K_S	Respond to of 78763

Re: IEHC I have not studied the company but those pension obligations could be a big liability. As you know, when GM did a structured BK, they got rid of their pension obligations (I think they got transferred to the private/public gov program). Although IEH has growing revenues it could be specific to one contract and/or specific product line. It's not clear that they are expanding into other equipment and/or platforms. From the company description scope, it sounds like they develop unique one off connectors typically done under government contract delivery terms (perhaps there is/was a requirement for "UAW" labor). The thing I would look for are (1) their order book for back log orders and/or the potential for follow on orders and/or expanding customer base. $15.4mln in revenues is very very small so there is contract and/or product line and/or customer order specific risk. I have seen similar companies that lose one key customer and their sales revenues get cut by 50%. My guess is that this company may be a sub-contractor to Lockheed and/or some other military contract manufacturer where very specific specifications and product requirements are demanded. The positive is if you can find out who their top 10 customers are and what percentage of revenues they account for, one of the customers could buy our the company. At 8 PE a large premium could be paid if the acquirer could leverage additional business from the other customers. Please post if you find anything and I will dig a bit more to see if there could be some hidden value for a potential acquirer. That pension liability issue would be solved if the acquirer assumes that liability. Mergers/acquisitions are easy now w/ all the cheap money so that would not be off the table. EKS