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Ahknaten UFPT
Rating: 0.75 (4 votes)
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UFP Technologies has one of those tickers that brings a bit of laughter into my life. UFPT. It reminds me of something a bit less politically correct -- perhaps that of someone passing gas. PFFT. UFPT. It's not as bad as BS (Bethlehem Steel), CUM (Cummins), or even RTFM (oky I made that one up). Plus, after such a volatile week in the markets, I'm sure there are many who would say UFPT or some other variation. Then again, the company is involved with making vacuum formed plastics, and if I were to imagine such a vacuum machine, I figure it might make the sound "UFPT" each time it was operating. Kidding aside, UFPT is one of the stocks in 3 of my other virtual portfolios (diversified, material/staples, and s&p 500 only). Although MSN's StockScouter gives it a score of 6, it receives a score of 'A' in the 'Fundamental' category. With a PE of 12, price/sales of 0.3, price/book of 1.4 and price/cash flow of 5.1, they're lower than the industry averages of 20.4, 0.8, 4.1 and 8.6. It seems from those measures that perhaps it's trading more like a value stock. I made a DCF analysis on UFPT that created the same EPS estimates as the ones that an analyst gave. The terminal sales was kept at 5%, and the terminal ROE was set so that it ranged between 8-10% (and a cost of capital of 8-10%). Based on the sensitivity analysis, it received a target price between $5.50 and $6.50. There are a few risks that I'd like to point out. It is a small company, with low volume and the stock can be rather volatile at times, as it could hit $5.50-$6.50 simply on volatility (or head down). Also, during the past 6 months, there has been some insider selling at prices ranging from $4.80 to $6.16. Just a few things to keep in mind. If you're the type who looks for a story, I'll just take a look at their recent press release -- the earnings increased year over year, gross margins improved, debt declined and there was a net income increased 39%. So, hopefully UFPT will go up a bit more. After a week like this, who knows what will happen in the markets, but I hope it'll be better than some of the other PFFT that I see out there. | ||
