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Everyone loves a bargain. If you are stingy, you want a bargain because you don’t want to spend a lot of money. Seems like it is fashionable to be frugal these days. Everyone loves a great defense. Good defenses are also very stingy. What better defensive player than Ray Lewis??
Not only is Ray Lewis a great football player, he dances almost as good as $$$MR. MARKET$$$. Did you know that he only runs a 4.9 for the forty yard dash? That’s what I ran when I was in college. Except he played at “the U”. I played at Penn.
Well, Ray Lewis plays for the RAVENS. Just like these ravens:
I suppose it makes sense that Ray plays for the Ravens. Get it? Ray. Ray-vens? Now where the heck is $$$MR. MARKET$$$ going with this?
Today I bought RAVN (Raven Industries) at 17.15. I will sell it in 4 to 6 weeks at 19.90. So what’s so ravin’ about RAVN?
Well, after the market was getting pummeled so severely in the last couple of weeks, I got to thinking that there has to be some quality companies getting sucked into this downdraft. So I ran the following screen:
Raven's business can be broken down into four main segments:
Engineered films refer to heavy-duty, large-scale plastic products such as sheeting to cover newly built homes and silage bags that store farm produce in silos.
Raven's most exciting growth opportunity seems to lie in the field of precision agriculture, which falls under its flow controls business. It's been busy selling global positioning system gear that lets farmers plow and fertilize fields or harvest crops without having to steer the tractor. That's a big plus if your farm is 1,000, 2,000 or even 10,000 acres. For wheat, soybean, corn and cotton farmers, that's par for the course. With the GPS system, a farmer can work at night. He only has to turn the tractor at the end of each row.
In 2008, Raven continued to generate solid sales and profit growth in spite of difficult market conditions. It was their eighth-consecutive year of record earnings per share, with sales to the agricultural market reaching all-time highs. This is their financial plan, right from their annual report:
Cash is king at Raven. Cash is real ... it can’t be manipulated. It is central to all we do at Raven, and we know how to generate it. Our balance sheet is clean, with no debt and $23 million in cash and investments. We ended the year with inventory about $4 million higher than it needed to be, and we can generate
additional cash as we bring it down to a more reasonable level.
Here are our cash management priorities:
• Invest in organic growth whenever we can achieve a return on investment of at least 15%.
• Increase the cash dividend annually.
• Repurchase Raven shares and/or pay a special dividend whenever we have excess cash.
• Make small, strategic acquisitions that can be bolted on to one of our core high-margin businesses.
• Free up cash by improving inventory turns at least 10% per year.
You have to love their diversification, which is what they too like to “crow” about:
Every year brings changes and the need to adapt. We don’t fall in love with any of our businesses – it’s performance that counts. Yet some operations go through down-cycles, as is the case with Engineered Films. Some businesses take time to reach their potential, which happened with Aerostar. Some are
going through a repositioning, as in Electronic Systems. Not every one of our four operations is going to perform at a high level every year, but together they have the strength and drive to achieve our long-term profit goals. That gives us a big advantage over single-product competitors who struggle when their
markets are in recession.
Look, I’m not the sharpest knife in the drawer. Well, actually I am. This company is not going to continue to grow its earnings like it has been in 2009. They even said that they won’t be able to do it. But that doesn’t mean its price should have beaten down like it has been. This company makes money. It is in boring businesses that are not negatively impacted by all this talk of recession, depression, regression, obsession. While RAVN’s stock price was plummeting, its revenues were growing AND it was still developing new products. Wake up people.
There’s not a lot of risk with this guy. Raven is diversified, it’s profitable, it’s cheap and it’s going to stay out of trouble because it ain’t got no debt. In the meantime, it pays you a dividend. That’s right..I’m cheap and I’m proud of it.
The Common Raven has coexisted with humans for thousands of years, and in some areas has been so successful that it is considered a pest. Part of its success comes from its omnivorous diet; Common Ravens are extremely versatile and opportunistic in finding sources of nutrition, feeding on carrion, insects and food waste, in addition to cereal grains, berries, fruit and small animals.
Some remarkable feats of problem-solving have been observed in the species, leading to the belief that it is highly intelligent. Hmmm…who does THAT remind you of???
I am HUGE!!!
$$$MR. MARKET$$$
www.mrmarketishuge.com
Not only is Ray Lewis a great football player, he dances almost as good as $$$MR. MARKET$$$. Did you know that he only runs a 4.9 for the forty yard dash? That’s what I ran when I was in college. Except he played at “the U”. I played at Penn.
Well, Ray Lewis plays for the RAVENS. Just like these ravens:
I suppose it makes sense that Ray plays for the Ravens. Get it? Ray. Ray-vens? Now where the heck is $$$MR. MARKET$$$ going with this?
Today I bought RAVN (Raven Industries) at 17.15. I will sell it in 4 to 6 weeks at 19.90. So what’s so ravin’ about RAVN?
Well, after the market was getting pummeled so severely in the last couple of weeks, I got to thinking that there has to be some quality companies getting sucked into this downdraft. So I ran the following screen:
- Price performance last 52 weeks had to be greater than 60% drop – meaning it’s a lot cheaper than it was a year ago.
- Dividend greater than 3.0% so that if it doesn’t take off right away, at least I get paid for holding it.
- P/E has to be less than 10. Meaning that relative to the rest of the market, it’s a bargain based on its recent earnings performance.
- EPS growth last quarter vs. prior year quarter has to be at least 20%. That’s right, I want a company that is GROWING its earnings in this environment.
- And just to prove it is not a flash in the pan, its 3 yr EPS growth and its 5 yr EPS growth has to be at least 25%.
- To make sure it’s not monkeying with its expense numbers, the top line – revenues – have to be growing at a 15% rate over the last 12 months.
- Return on Assets has to be > 5%...good performance metric.
- Return on Equity has to be > 10%...even better performance metric.
- Debt to capital has to be less than 10%. You gotta love a clean balance sheet.
Raven's business can be broken down into four main segments:
- Engineered Films manufactures rugged reinforced plastic sheeting used in construction, industry, and agriculture.
- Flow Controls' electronic speed and GPS-based systems have both agricultural and marine applications.
- Electronic Systems makes avionics and communications systems, as well as circuit boards used in "bed controls."
- Aerostar manufactures high-altitude aerostats (read: "balloons") used in commercial research, as well as parachutes and specialty outerwear for the military.
Engineered films refer to heavy-duty, large-scale plastic products such as sheeting to cover newly built homes and silage bags that store farm produce in silos.
Raven's most exciting growth opportunity seems to lie in the field of precision agriculture, which falls under its flow controls business. It's been busy selling global positioning system gear that lets farmers plow and fertilize fields or harvest crops without having to steer the tractor. That's a big plus if your farm is 1,000, 2,000 or even 10,000 acres. For wheat, soybean, corn and cotton farmers, that's par for the course. With the GPS system, a farmer can work at night. He only has to turn the tractor at the end of each row.
In 2008, Raven continued to generate solid sales and profit growth in spite of difficult market conditions. It was their eighth-consecutive year of record earnings per share, with sales to the agricultural market reaching all-time highs. This is their financial plan, right from their annual report:
Cash is king at Raven. Cash is real ... it can’t be manipulated. It is central to all we do at Raven, and we know how to generate it. Our balance sheet is clean, with no debt and $23 million in cash and investments. We ended the year with inventory about $4 million higher than it needed to be, and we can generate
additional cash as we bring it down to a more reasonable level.
Here are our cash management priorities:
• Invest in organic growth whenever we can achieve a return on investment of at least 15%.
• Increase the cash dividend annually.
• Repurchase Raven shares and/or pay a special dividend whenever we have excess cash.
• Make small, strategic acquisitions that can be bolted on to one of our core high-margin businesses.
• Free up cash by improving inventory turns at least 10% per year.
You have to love their diversification, which is what they too like to “crow” about:
Every year brings changes and the need to adapt. We don’t fall in love with any of our businesses – it’s performance that counts. Yet some operations go through down-cycles, as is the case with Engineered Films. Some businesses take time to reach their potential, which happened with Aerostar. Some are
going through a repositioning, as in Electronic Systems. Not every one of our four operations is going to perform at a high level every year, but together they have the strength and drive to achieve our long-term profit goals. That gives us a big advantage over single-product competitors who struggle when their
markets are in recession.
Look, I’m not the sharpest knife in the drawer. Well, actually I am. This company is not going to continue to grow its earnings like it has been in 2009. They even said that they won’t be able to do it. But that doesn’t mean its price should have beaten down like it has been. This company makes money. It is in boring businesses that are not negatively impacted by all this talk of recession, depression, regression, obsession. While RAVN’s stock price was plummeting, its revenues were growing AND it was still developing new products. Wake up people.
There’s not a lot of risk with this guy. Raven is diversified, it’s profitable, it’s cheap and it’s going to stay out of trouble because it ain’t got no debt. In the meantime, it pays you a dividend. That’s right..I’m cheap and I’m proud of it.
The Common Raven has coexisted with humans for thousands of years, and in some areas has been so successful that it is considered a pest. Part of its success comes from its omnivorous diet; Common Ravens are extremely versatile and opportunistic in finding sources of nutrition, feeding on carrion, insects and food waste, in addition to cereal grains, berries, fruit and small animals.
Some remarkable feats of problem-solving have been observed in the species, leading to the belief that it is highly intelligent. Hmmm…who does THAT remind you of???
I am HUGE!!!
$$$MR. MARKET$$$
www.mrmarketishuge.com
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