Tecumseh Products Company (NASDAQ:TECUA)

With a current ratio of 1.78, zero long term debt and a stock trading at .28 of sales and .56 of book value, how can't this company be a take over candidate. I'm sure there's a company, somewhere, that is contemplating buying them right now.

Bitter battle for control of company pits relatively new CEO against entrenched Herrick family interests. CEO recapitalization plan voted down by shareholders. Looks like a mess, and with Herricks in control likely to be used as a personal piggybank until it ends up in bankruptcy court.

Isn't summer coming?

This stock is over-shorted and undervalued. A short squeeze is likely. A 25% pop in the next 3 months or less is a possibility.

I simply used the screener to identify 1-star companies with the highest 52-week gain. The 1-star rating should mean they are bad companies and the 52-week gain should mean they are overpriced. We’ll see how it works!

This thing makes Bear Stearns look like Google. -EPS and near its 52 week high. HMMMM.... I think I will short this thing in real money. I see lots of red on their balance sheet.

sales plummeting

stock soaring - why?

It is paying down debt I guess

52 week high on a one star caps stock. Also given an underperform by TMFEldrehad, and I am trying to pick my CAPs score up.

Clearly a company on poor footing. With its next earnings announcement expected in mid-May, don't expect it to outperform for much longer than that.

based upon the current market

Going for the "hot one star" stocks here.

Down Down Down we go.Not much to like here.

Tecua insiders have consistently been selling their shares over the past year. In fact some of them have very little ownership left. Tecua is closing factories and plants, laying off people left and right and continue to downsize all their operations.

It's been a long time since this company actually made some money. At anything over $20 selling this stock is like taking money to the bank.

shortguru

Tecumseh Products Company has been selling off its non-core businesses in an attempt to become solely a compressor company.

They disclosed several risks that do not appear priced into the stock.

80% of their manufacturing takes place outside of the united states

41.7% Brazil

27% France

12% India

They have stated that their results are senitive to movements in the exchange rates of those countries. They have entered into currency forward contracts. Those only serve to mitigate currency losses and not prevent the harm they cause to the business structure.

All three of those country's currencies have had extremely strong movement against the dollar and even if the exchange does not hurt the company's bottom line, the erosion in competitiveness might.

"Due to the high material content of copper (and, to a lesser extent, aluminum) in compressor products, our results of operations are very sensitive to the prices of these commodities. Overall, commodity prices increased very rapidly during 2005, 2006 and into 2007. Due to competitive markets, we are typically not able to quickly recover these cost increases through price increases and other cost savings."

Copper has retreated a little since this comment was made, but long term commodity prices are not likely to see a substantial decline.

Also

"Interest expense amounted to $25.5 million in the first nine months of 2007 compared to $16.8 million in the first nine months of 2006."

25m in interest ? This ship is sinking and when they run out of cash from the sale of the other businesses, the party is officially over.

The only thing supporting the stock price is the book value. They are liquidating assets to cover their debt load but this still doesn't make them profitable. What they haven't done is to announce a major reorganization. Without this they are going to go in to slow burn mode regardless.

I also question the valuation of their physical assets, they could well be high.

In summary, I would guess about $11-$14 by next spring.

Check the book value, more than the current share price. Company is re-positioning and will perform better going forward.

I like Toshiba compressors better. Come on, why should the price be where it is? What is so great about their compressor that anyone would buy this? And if their compressor is that great, why aren't they profitable?