This company has three businesses: GPS,SMC and VLI.
GPS: Constructs gas fired power plants, Wind farms,etc. Contributes 95% of revenue and earnings.
SMC: Telecom business for government. Contributes a small fraction to the business
VLI: They have disposed this business in Dec 2010. It has contributed to losses of 3,9 and 6 million dollars in year 2010,2009 and 2008 respectively.
So basically we need to focus on GPS portion of the business. This business earned net income of about 8M in 2009 and 10M in 2010. The income increased in 2010 even though revenue fell about 16% because the building of gas fired power plant is low margin business compared to wind turbine construction.
Company has 83M in cash on hand. Current Market cap is 123M.
Insiders own about 35% of the company (MSR Advisors is owned by Levinson).
Valuation:
Enterprise Value = 50M
Normalized Annual FCF = 10
EV/FCF = 5x
That is a pretty cheap. Given that insiders own quite a bit of the stock.....the odds that they will make foolish decision when allocating the 85M in cash is somewhat mitigated. Basically they have skin in the game.
This is not a recommendation to buy or sell. Please do your own due diligence.
GPS: Constructs gas fired power plants, Wind farms,etc. Contributes 95% of revenue and earnings.
SMC: Telecom business for government. Contributes a small fraction to the business
VLI: They have disposed this business in Dec 2010. It has contributed to losses of 3,9 and 6 million dollars in year 2010,2009 and 2008 respectively.
So basically we need to focus on GPS portion of the business. This business earned net income of about 8M in 2009 and 10M in 2010. The income increased in 2010 even though revenue fell about 16% because the building of gas fired power plant is low margin business compared to wind turbine construction.
Company has 83M in cash on hand. Current Market cap is 123M.
Insiders own about 35% of the company (MSR Advisors is owned by Levinson).
| Shares | Beneficial | |||||||
| Beneficially | Ownership | |||||||
| Name and Address | Owned (1) | Percentage (1) | ||||||
Daniel A. Levinson (2) | 1,386,270 | 10.15 | % | |||||
William F. Griffin, Jr. (3) | 1,256,839 | 9.24 | % | |||||
Rainer H. Bosselmann (4) | 420,660 | 3.06 | % | |||||
Arthur F. Trudel (5) | 139,124 | 1.01 | % | |||||
James W. Quinn (6) | 99,570 | * | ||||||
Daniel L. Martin (7) | 50,000 | * | ||||||
W.G. Champion Mitchell (8) | 20,000 | * | ||||||
William F. Leimkuhler (8) | 20,000 | * | ||||||
Henry A. Crumpton (8) | 20,000 | * | ||||||
Cynthia A. Flanders (8) | 20,000 | * | ||||||
DeSoto S. Jordan (9) | 5,000 | * | ||||||
Officers and Directors as a Group (11 Persons) (10) | 3,437,463 | 24.37 | % | |||||
NSB Advisors LLC (11) | 4,643,098 | 34.14 | % | |||||
Richard L. Scott (12) | 1,673,000 | 12.30 | % | |||||
MSR Advisors, Inc. (13) | 1,363,270 | 9.99 | % | |||||
Utility Service Holding Co., Inc. (14) | 1,110,850 | 8.17 | % | |||||
John W. Blackburn (15) | 817,106 | 6.01 | % | |||||
Valuation:
Enterprise Value = 50M
Normalized Annual FCF = 10
EV/FCF = 5x
That is a pretty cheap. Given that insiders own quite a bit of the stock.....the odds that they will make foolish decision when allocating the 85M in cash is somewhat mitigated. Basically they have skin in the game.
This is not a recommendation to buy or sell. Please do your own due diligence.
Great find. It is thinly traded and if you put a low-ball buy order it might get executed. Do they do any share buyback or any any plans of issuing dividends? They can easily cover 3-5% dividend. Obama's recent emphasis on natural gas in the energy policy might move the stock in the long term. I am not sure if the govt will really give any incentives to gas using technologies.
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