June 24, 2004 Cohesant Technologies (COHT)

Hello Friends! I meant to post this one earlier today when the stock was a bit higher...unfortunately it closed off its highs...so was NOT on the list of highest % gainers at the close...but since it was on the list for awhile and I WAS going to post...well it just goes to show that I should finish that job! Please remember as always that I am an amateur investor so please do your own investigation of stocks discussed on this website and consult with your own professional investment advisors before making any decision based on what is here!

I do not own any shares nor do I own any options or leveraged positions on this stock. COHT closed today at $10.06, up $.09 or 0.90% on the day. According to the Yahoo Profile, Cohesant Technologies "...is engaged in the design, development, manufacture and sale of specialized two component dispense equipment systems and replacement parts used in the operation of this equipment and specialty two component epoxy coating and grout products." Apparently this equipment is used in construction, transportation and marine industries.

On June 16, 2004, COHT announced 2nd quarter 2004 results. For the quarter ended May 31, 2004, net sales "increased 23.5% to $5,290,141 from $4,284,650 for the same quarter last year." Net income came in at $529,153, a 56.4% increase over the $338,391 reported the prior year. On a fully diluted basis this worked out to $.20/share compared to $.13/share the prior year.

How about longer-term? Looking at the "5-Yr Restated" financials on Morningstar.com shows a steady rise in revenue from $11.7 million in 1998 to $16.8 million in the trailing twelve months. Earnings per share have increased each and every year from $.26/share in 1998 to $.52/share in the TTM. Free cash flow looks nice too! They were at $0 in 2000, increased to $1 million in 2001 and 2002, and then to $2 million in the TTM. Their balance sheet also looks nice with $2.8 million in cash enough to cover the current liabilities of $2.1 million. They, according to Morningstar, do not have any long-term liabilities. In addition, COHT has $7.5 million in other current assets.

Cohesant Technologies sells products through its two subsidiaries: Glas-Craft and Raven Lining Systems. It was interesting to read the story of June 10, 2004 in which COHT announced the INITIATION of a cash dividend of $.13/share to be paid semi-annually. This is just ANOTHER plus for this stock.




What about 'valuation'? Taking a look at "Key Statistics" on Yahoo, we can see that this is a TINY company....more nano than NVEC lol....with a market cap of $26.40 million. The trailing p/e is reasonable at 16.04 and the price/sales is nice at 1.41. No PEG is recorded due to the fact that probably no five year estimates are out there.

Cohesant has only 2.62 million shares outstanding with only 900,000 of them that float. I mean TINY! There are 1,000 shares out short as of 5/10/04 representing 0.11% of the float or 0.2 trading days so this doesn't look significant to me.

Interestingly, with the declared dividend, this company now yields 2.73%, not too shabby, and NO stock dividends are reported on Yahoo.

What about 'technicals'?

Looking at a basic Yahoo line graph, we can see that this stock has been "behaving" nicely, moving higher in a steplike fashion, from $4 a year ago, to $7 in November, 2003, and now to the $10 level. I don't have a point and figure chart, but this looks nice to me.

What do I think? Well this is a TINY company, so an investment in this stock could be volatile. However, the numbers look nice, the recent earnings report is impressive, the free cash flow is pretty, the new dividend is attractive, technicals look fine and the valuation is downright reasonable. I guess I like this stock lol. And technically, I CAN buy another stock with my portion sale at a gain....but will try to SIT on my hands lol...and let the market demonstrate a little more strength before stretching into another position. At least for the next 5 minutes!

Thanks again for stopping by! If you have any questions, comments, or words of encouragement, PLEASE drop me a line at bobsadviceforstocks@lycos.com I LOVE to hear from any readers....just nice to know you are out there!

Have a great FRIDAY everyone!

Bob