+ Watch MSA
on My Watchlist
The Company develops, manufactures and supplies sophisticated products that protect people's health and safety.
Purchased $4K of MSA in my Roth IRA with new proceeds. Yields 2.4% and pays dividend quarterly. Dividend growth (5 yr) 4.9%, PE 19 and 52 week price performance 29.9%. Cumulative gain since purchase on 12/14/12 is 8.4%. I intend to purchase another $1K within the next few months.
Excerpt from an unedited CAPSCall article anticipated for publication on 18-DEC-2012The next selection for the newly launched Inflation-Protected Income Growth Portfolio is safety equipment manufacturer Mine Safety Appliances (NYSE: MSA). While it may not exactly be a household name as a company, it is the go-to supplier of choice for those whose lives depend on their equipment.With a history of rising dividends that stretches back for 41 years, the company’s shareholder friendly behavior predates the Bush dividend tax cuts by a few decades. That makes it highly unlikely the pattern will be derailed just because those cuts are slated to expire. And with a respectable payout ratio of 46%, it has considerable coverage even if things do go bad.
A top supplier to a fast growing industry
As we start to forget about mines they will appear to be safer thus helping this one out. Plus, the religous based 'family radio' not sure of the actual name, but they mentioned it as a christian friendly company. So I guess with God, oh and that 3 for 1 split a few years ago, it's no surprise that after I sold half my shares at 100% the rest at still up 70%. Down lately but I think it will 'rise' again. Sorry for the religous pun.
High percentage of insider ownership.
Motley Fool "hidden gem."
MINE SAFETY EQUIPMENT........
Retirements. There will be an increased demand for homeland security products as we move closer to the next general election. If they are able to continue to keep manufacturing costs in check, I believe that they'll profit from world events.
Mine Safety Appliances is a global leader in the development, manufacture and supply of sophisticated products that typically integrate any combination of electronics, mechanical systems, and advanced materials to protect users against hazardous or life threatening situations. The company’s comprehensive line of safety products includes self-contained breathing apparatus, gas masks, gas detection instruments, head protection, respirators, thermal imaging cameras, fall protection, and ballistic body armor. These are used by workers around the world in the fire service, homeland security, construction, and other industries, as well as the military.The company reported record $257 million of sales in the fourth quarter of 2006, up $15 million from the fourth quarter of 2005 and 22% higher than the third quarter of 2006. The company brought out parametric capabilities in its breathing apparatus, a new generational thermal imaging camera, the evolution 5200HP, successful new instrument such as the ALTAIR Single-Gas portable instrument, and the latest generation of the SAFESITE Multi-Threat Detection System. These all introductions are set to fuel the company’s top-line growth in the coming two years.The company has recently acquired Paraclete Armor and Equipment, Inc., a rapidly growing innovator and developer of advanced ballistic body armor used by military personnel, including Special Forces units of the U.S. military for $30 million. This will strengthen the market position of the company and help it to generate sustained revenues. Additionally it has initiated work of a new factory in China primarily to serve that strongly growing market and is expanding its business globally. Hence looking at the growing demand for the company’s products in the rapidly growing personal protection equipment market, equally supported by its increasing presence in the global markets, the company seems to be well placed to achieve strong organic growth.
Cost of Goods Sold and SG
With Dems in charge, military spending will be hard to come by.
As the US increases withdrawals of troops from Afghanistan and at some point Iraq(probably within the next 18-24 a dramatic decrease even though short term increases) this company will not have as high of a demand for its products. Having spent the past 23 years fighting this nation's wars I know the US cuts way back on R
Falling level of defense spending will cut deeply into revenue and earnings
Recently, it was reported that MSA's competition who provided the rebreathers in the Sago mining disaster continue to be faulty. If MSA can build on a reputation for quality and stay off the list of inferior safety products, it could come out ahead.
Mine Safety Appliances, established in 1914, provides products, technologies and services that protect peoples health, safety and the environment. MSA has 3 business segments, MSA North America; MSA Europe; MSA International. MSA provides a comprehensive line of products for fireifhgters, homeland security, law enforcement, military, construction , oil and gas, as well as, other industries. MSA also offers a wide range of consumer and contractor safety products available through select retail outlets. These products are marketed for the "do it yourself" and small contractor market. MSA's product line includes,Air-Purifying ProductsSupplied-Air RespiratorsPortable & Permanent Gas Detection InstrumentsThermal Imaging CamerasFire HelmetsBody ArmorHead, Eye, Face and Hearing ProtectionFall ProtectionMining and Specialty ProductsMSA builds its products with an "integrated system" capability that ensures compatibility with individual MSA products. MSA's components for it's products are mostly formulated, machined, moldedand built in-house for raw materials. This gives MSA greater manufacturing control and unequaled quality assurance for it's products. MSA has it's headquarters and R&D facility in Pittsburgh, PA. It's manufacturing facilities are located in the United States and various other countries.MSA North America 2005 sales rose to a record $575.9 million from $564.6 million in 2004. Income increased 12% to 62.1 million. MSA North America generated 63% of the company's total revenue of $907.9 million in 2005. Delays in federal funding for fire departments reduced sales of self-contained breathing apparatus (SCBA) for the fire service, while sales of military gas masks to the U.S. military declined from peak levels due to government contracts expiring. MSA made up for the gas mask decline with contracts received for over $53 million to manufacture a quarter million Advanced Combat Helmets (ACH) for the U.S. Army.MSA also earned $22 million to ship the Modular Integrated Communications Headset System (MICH) in 2005. The MICH is an innovative hands-free, two way radio system that seamlessly integrates with the ACH. MSA also had higher sales of Cairns Fire Helmets and it's line of protective headgear. The largest head gear order in 2005 was placed by the District of Columbia Council of Governments for Cairns fire helmets totaling $1.2 million in December 2005.Department of Homeland Security placed a $1.4 million contract for the SafeSite Multi-Threat detection System. The SafeSite system provides wireless monitoring of chenical warfare agents, toxic chemicals and other hazardous materials at public events and mass transit systems.Major contracts in 2005 included,$4.5 million from the New York City Police Department for Millenium gas masks and Response Escape Hoods.A $1.3 million contract from the California Highway Patrol for Millenium gas masks.A $1.1 million contract from the State of Pennsylvania for air-purifying respirators and thermal imaging cameras.In September 2005 MSA acquired MicroSensor Systems, Inc. of Bowling Green, Ky. This now gives MSA Surface Accoustic Wave based chemical sensing technology used to detect chemical warfare agents.2005 sales at MSA Europe rose 8% to 87.2 million from $173 million in 2004, income increased 65% to $11.1 million from $6.7 million in 2004. MSA Europe's sales account for 21% of the company's sales of $907.9 million in 2005.MSA Europe launched the Alpha Series of SCBA in Europe. MSA also launched the AirElite 4H SCBA, a closed circuit device that supplies oxygen for up to 4 hours. The AirElite is designed for firefighters, miners and oil and chemical workers who need a long-term air supply.In 2005 MSA International's sales rose 26% to a record $144.8 million from $114.9 million in 2004. Income in 2005 increased to $9.2 million from $8.5 million in 2004. MSA International's sales account for 16% of MSA's net sales of $907.9 million in 2005.MSA International has key markets in Latin America, China, Asia-Pacific, the Middle East and Africa. In the Mid-East, MSA received $5.5 million from the government of Iraq for SCBA's. To enhance future growth in South Africa, MSA formed a new holding company in January of 2006 with Mine Workers Investment Company to ensure compliance with government-established Black Economic Empowerment requirements. This venture marks the culmination of a strategic opportunity indentified by MSA in 2004.BEE is a South African government program similar to affirmative action in the United States. Companies that are BEE-certified are better positioned to compete for public sector contracts. The MSA and Mineworkers Investment Company venture will pursue oportunities to create a safer environment for South African miners while serving customer needs as an approved BEE supplier.Although the mining segment generates less than 5% of MSA's worldwide sales, it remains a leading market for MSA International, accounting for 20% of total sales in 2005. In 2005 MSA spent $21.9 million on R&D activities.I'm definitely buying as much MSA as I can. The only downside is a reduction in the spending patterns of government agencies could materially and adversely affect net sales, earings and cash flow.
MSA and this industry in large is slow to react to market changes and needs.
Threat of terrorism is not going to go away.MSA will benefit.
Mine Safety Appliances Company engages in the development, manufacture, and supply of products that protect people?s health and safety. The energy availability instability in the U.S. and need for natural resourses will drive increased emphasis on mining and mine equipment of all kinds from a macro sense. MSA should be able to capitalize on this scenario, not only in the U.S. but also globally.
Lord knows there is room for improvement here and I believe Mine Safety are the guys and gals to do it. Over the next few years I think this company will prove to be a real winner and who knows maybe the stock holders will come out on top too.
Summary:MSA is a great company to own, especially for those averse to risk. Management is top-notch so you won't have to keep an eagle eye on them. A family owned and operated business since its inception in the early part of the 20th century. Don't expect great performance over the next 2-3 years, but expect steady market-beating returns over the next 5-10 years. I'm putting this stock in a portfolio for my newborn daughter, who just turned 2 weeks old. Pros:Solid family-owned business and strong management with high insider ownership.Revenue stream diversified across countries and industries. Strong commitment to R&D which has succeeded in producing new products and fueled organic growth.Should benefit from a world that seems to need increased safety and security.Currently, looks a little on the cheap side: Price/FCF < ROE (about 0.87, for all you Ron Muhlenkamp fans). This indicates to me that the price shouldn't go much lower unless FCF dips.Cons:Roughly a third of the company's revenue is erratic and unpredictable. This includes military spending (ACHs and gas masks) and some firefighter spending that depends on government grants. Unfortunately, this third of the revenue also tends to be higher margin.Company boomed in post-911 USA with increased spending for homeland security and increased military spending for the war in Iraq. Over the past year, this funding has begun to diminish and management is having to adapt to c
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