Today I will round out my 2020 Triple Net Active Portfolio, with four additional names, for a total of eight. On Wednesday, I unveiled the first four, Madison Square Garden Entertainment (MSGE) , Sanmina (SANM) , Argan (AGX) , and Rex American Resources (REX) . Here are the "final four".
Mattress and upholstery manufacturer Culp (CULP) operates in what can be described as a boring, mundane industry, which is alright with me. Those businesses tend to be overlooked and out of the mainstream. The company has had a rough run during the pandemic, as sales and earnings have suffered, but the future appears brighter, and the stock is already well off its bottom. Currently trading at 2.52x net current asset value (NCAV), the company ended its latest quarter with $46 million, or about $3.74 per share in cash and short-term investments, and no debt. CULP is trading at about 21x next year's "consensus" estimates (just two analysts cover it), and yields 3.1%.
Daktronics (DAKT) , which manufactures and markets electronic displays, coincidentally also trades at 2.52x NCAV. After a couple of rough quarters, it managed to surprise in its first quarter (ended August 1st), earning 17 cents/share which was well ahead of the six-cent estimate (just one analyst covering). The company ended that quarter with about $1 per share in cash, which may seem inconsequential, but not when your stock is trading at $3.96. Shares have not recovered from the pandemic, and are down about 35% year-to-date. DAKT trades at about 20x next year's "consensus" estimate.
Haynes International (HAYN) , another company that most of us have likely never heard of, makes and sells nickel and cobalt based alloys. Currently trading at 2.61x NCAV, shares are down 50% year-to-date, and the company is not expected to be profitable until 2022. The balance sheet looks decent, with $65 million, or about $5.29 per share in cash, and $38 million in debt. HAYN currently yields 5.1%.
Last but not least is footwear designer and distributor Weyco Group (WEYS) , which trades at 2.45x NCAV, and 1.02x tangible book value, but garners no analyst coverage. Shares are down 40% year-to-date, and the company's most recently reported quarter was horrendous, with revenue down 73%, in what can best be described as the much dreaded "Covid quarter". WEYS does have about $26 million, or about $2.65 per share in cash and investments, and no debt, and currently yields 6.1%.
There you have it, a rag-tag group of names, and I honestly don't know how it will all pan out over the next year.
