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I came across ASV, Inc. (ASVI) today on the list of top % gainers on the NASDAQ today. ASVI closed today at $44.07, up $4.49 or 11.34% on the day. Unlike most of the stocks I discuss on this blog, I DO own some shares of ASVI in a managed account in which I do NOT make any investment decisions. According to the Yahoo "Profile" on ASV, ASVI "...designs, manufactures and sells track-driven all-season vehicles."
On October 28, 2004, ASVI reported 3rd quarter 2004 results. Net sales totaled $40.6 million for the quarter up from $29.2 million in the same quarter last year. Net earnings increased to a record $4.4 million or $.34/share compared with $3.1 million or $.29/share last year. (even though the number of diluted shares jumped 22% in the quarter!) The company, with the Loegering acquisition, announced anticipated results for 2004 showing a 59-64% increase in sales. Also diluted eps was expected to increase 54-62% over 2003. This was a great report, strong revenues and earnings with bullish guidance from management!
How about longer-term? Taking a look at the "5-Yr Restated" financials on Morningstar.com, we can see a fairly steady increase in revenue from $36.2 million in 1999 to $44.2 million in 2002. However, from that point, revenue has exploded to $127.5 million in the Trailing Twelve Months (TTM).
Earnings were also relatively flat between 1999 and 2002 when they actually dropped from $.14/share to $.13/share. However, since then they have grown strongly to $.78/share in 2003 and $1.06 in the trailing twelve months.
Free cash flow which was a negative $(5) million in 2001, improved to break-even in 2002, and then to $18 million in 2003 and $13 million in the TTM.
Balance-sheet-wise, this stock looks nice. As reported on Morningstar, ASVI has $42.9 million in cash, plenty to cover BOTH the $12.8 million in current liabilities, and the $1.8 million in long-term liabilities three times over! In addition ASVI has $58.6 million in other current assets.
What about valuation? Looking at "Key Statistics" on Yahoo, we can see that this is a small cap stock with a market cap of $556.6 million. The trailing p/e is a bit rich at 39.67, with a forward p/e (fye 31-Dec-05) of 27.89. With the rapid growth rate predicted, the PEG comes in at a bit more reasonable 1.28.
Yahoo reports only 12.63 million shares outstanding with only 3.20 million of them that float. As of 10/8/04, there were 371,000 shares out short representing 11.59% of the float but only 2.576 trading days of volume. (I use 3 days arbitrarily as my cut-off for significant short position).
Yahoo reports no cash dividend, and the last stock dividend reported was a 3:2 split in May, 1998.
How about "technicals"? For this, I like to turn to Stockcharts.com, where I like to examine the Point and Figure charts:
Here we can see a terrific chart, a stock that was trading lower through 2001, until March, 2003, when it broke through a resistance level at around $10.50, and has traded higher since. The stock looks quite strong imho.
So what do I think? Well I do OWN some shares already, but discounting that, the recent earnings/revenue report and the guidance is superb. The valuation is a bit cheap, this is no bargain. However, the balance sheet looks nice, and the chart looks just fine.
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