Preformed Line Products Company (NASDAQ:PLPC)

This company is cheap, and it is churning out cash / earnings. It looks like they stumbled in FCF generation over the past 12 months, but they look to be back on track. There is a healthy profit margin, and a solid return on capital. I believe there is a lot of room for this small cap to run.

Screener

Small size leaves lots of room for growth, heavy insider ownership, reasonable price multiples, and a decent dividend to boot. Solid pick.

Volatile little company that makes wireline and other subterranean infrastructure, with 50+% of its business coming from rest-of-world (ex-US).

It's been on an acquisition spree for the last 4 years, getting rid of some free cash, and the goodwill and amortization numbers have sort of confused the balance sheet. The latest acquisition, Dulmison, bought from Tyco Electronics, serves the 'transmission, distribution and fiber optic' arena and as far as management seems to want to state, the acquisition has been immediately accretive. However, earnings have been lumpy - they put in a nice miss in 1Q10 and a strong beat in 3Q10 - and they have not been able to grow a cash pile, stuff's burning a hole in their pocket and cash on hand has been on a downtrend, from $30m to $23m - since 2006. They pay a little dividend that boils down to an 18% payout ratio. Debt to equity is 5%; nearly 2/3 of shareholder equity is intangibles and goodwill.

I think upside could include greater profits from integration than is currently realized (gritting my teeth, because so often the opposite is true,) a stronger economic recovery worldwide, and a possible moderation of commodity costs. Downside is pretty much the mirror flip of the above - higher commodity costs, worldwide stagflation, and the usual integration snafus.

The company was cheap a year ago, selling well below P/B and with a P/E in the mid single digits, but share price has doubled since then. Insiders are bullish and own 34% of the company, unusual, but they have issued nearly 1.2% of the total equity of the company in share-based compensation to directors in the last year; the CEO's wife is a director and they even issued some number of shares to some entity called 'Rabbi Trust.'

I think the company is probably set to tick along, but I think buying it here means banking on it doubling its earnings this year, and I see no sign that that is likely to occur. Made the pick before I did the DD, so take it for what it's worth.

"Ben Graham" screen on ycharts.com

scrooge

Scrooge portfolio

Member of the 2011 Scrooge portfolio.

My Screen

Anticitrade pick that I want to follow. Doesn't look spectacular to me, but it does look undervalued enough so that I decided to give it the green thumb.

This is 1 of 3 microcap stocks that showed up with a 5 star rating, more than 25% held by insiders, a positive amount of cash per share, and a P/B of less than 1.3. The other two were AE and TBSI. The current ratio is 3.1, and this stock is priced much better than average in this industry. It also has a 2.2% dividend.

screen pick

If you haven't looked into this one, it may be time. I think it may be my favorite. No attention is ever given... PLPC has performed great over the past couple of years, and the dividends are nice. Nice "hidden gem" imo.

Trying to get in at the bottom of good stocks.

"Maintenance of underground networks" sounds good to me.

I am in the utility industry and we use PLPC hardware on almost every transmission line and distribution line project. Their product line is vast and will reap the rewards of the ensuing OBAMA triggered transmission line buildout across the USA in the years to come.

Testing out a portfolio of smallish-cap 5-star stocks found using the CAPS screener. All picks have at least 50 allstars backing them, which should be enough to minimize star rating fluctuations. It's been less than a week, but so far so good!

Buy on the dip. Make yourself a potato chip.

This small cap with fine financials and good looking management will grow especially if two kinds of capex grow: power transmission lines, and telecom transmission lines (especially fiber to premises). If think these two capex streams will grow, both inside and outside the U.S. The weak U.S. dollar (which I expect to continue as a medium term secular trend) will only help PLPC. I've owned the stock for a few years, and it makes sense to add it to my CAPS portfolio.

I own this stock in my real portfolio, and if I could only own one stock, this would be it, heres why:
-They've been paying dividends every three months from the start.
-Their financials are stellar.
-No one on Wall St is paying attention to them.
-Insider ownership is over 90%, and that's one of my favorite signs, it doesn't always translate into a fantastic company, but it does mean that the insiders have a tangible investment in the company and they really believe in it.
This really is one of my favorite companies. They're one of those behind the scenes kind of businesses that are integral to our society, yet no one really knows about. They make connectors and splicing ends for fiber optic cables, coax, all kinds of cables, wire grips and braces, protective wire or cable coverings...basically all the little bits a pieces that help connect and stabilize our communications and electrical infrastructure.
Super awesome value.

also:
-PLP SOLAR-

Preformed Line Products (PLPC) acquired Direct Power and Water Corporation today (4-13-07) and formed a new division of PLPC, PLP Solar. This sounds like good news to me. They'll have a whole new line of revenue and a whole new area of that they can expand into thats related to their main business, but we'll see.