April 8, 2011
Miller Industries, Inc. (MLR)
Written By Thomas Byrne
From The Periscope Report: “Miller Industries, Inc. (MLR) is the worldwide leader in the manufacture of tow-trucks and wreckers. A stellar management team has grown this company for 20 years both organically and through acquisitions. The founder of the company, William ‘Bill’ Miller, has made over 40 acquisitions in 16 years, which has helped MLR become the biggest company in the industry. “For the 4Q ended December 2010, sales increased 19% YoY to $79.7 million, after increasing 28% YoY in the prior quarter. Sales were up 8% sequentially, a sign the order rate is picking up after the worst recession in U.S. history. It was the first sequential increase in sales in two years. … Operating income surged 86% YoY to $6.1 million, after increasing 75% YoY in the prior quarter. Operating income was up 26% sequentially (note the acceleration in growth, the ideal scenario we look for in Top Recommendations). … Over the last two years, while the competition was struggling to stay afloat, MLR was reinvesting in the business through enhancements made to its manufacturing facilities, which has made the company more efficient. … MLR has a great management team that has built the largest tow-truck company in the world. But very few people know about MLR yet, which is why it is undervalued based on traditional metrics (it has only one analyst on coverage). Backing out the $46 million in cash, MLR is trading for 0.4 times sales, 0.9 times its tangible book value, and just 8.8 times expected earnings for 2011. Plus, the stock is undervalued based on our NPV models—our fair value is $31 compared to the current stock price of $15. These are all critical and imperative factors making MLR our Number Two Top Recommendation.”
Tom Byrne, The Periscope Report, 4025 Sunset Ridge Drive, Helena, MT 59602, 4/11
I have a web site where I research penny stocks and stocks under five dollars. I have many years of experience with these type of stocks. If theirs anyone thats interested in these type of stocks you can check out my web site by just clicking my name. I would like to comment about miller industries. I remember checking out the company miller industries about ten years ago back than it traded between 2 and 4 dollars a share. I find that the best measurement of the value of a company is the price to sales ratio or market cap’ this simply tells you what the value of the business is compared to its size so if a company does 1 billion dollars in annual sales and has a market cap of just 100 million dollars. theoretically you could buy the company for just 100 million dollars. Their is a stock called Sanmina-SCI Corp. (SANM) integrated electronics manufacturing services business. This company has a market cap of just under 1 billion dollars but does almost 7 billion dollars in annual sales the company is profitable their performance has been improving over the last several years. In addition to this the company as of april 2 had 650 million dollars in cash on its balance sheet. You could almost buy the business with the cash the company has on hand. You could easily buy back 20 maybe 30 percent of the outstanding shares and still have several hundred million dollars of cash left over. This is one of the most undervalued stocks around today. The stock trades around 12 dollars a share. I think the stock could reach 100 dollars a share over the next five years.