M&F Worldwide (MFW) Shares Surge 10% on Positive Article
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Shares of M&F Worldwide Corp. (NYSE: MFW) are up nearly 10 percent in midday market movement on Monday after Barron's wrote that the stock is a rarity in today's stock market.
Shares of M&F are trading under four times the company's 009 earnings of $6.11 per share, while through the first nine months of 2010 it has earned $4.81, on pace for more than $6 per share again.
The stock is also valued at just two times the company's annual free cash flow.
The holding company is controlled by billionaire Ronald Perelman, and is a leading maker of checks, as well as the licorice extract used to flavor menthol cigarettes.
Perelman owns 43 percent of the company, and is M&F's chairman. Barron's noted that one bull sees Perelman ultimately could buy out the remaining shares of the company. M&F has a current market value of $425 million, while its public float is $250 million.
If Perelman were to buyout the company for $385 million or $35 per share for the publically held stock, he would be able to fund it with approximately $200 million in annual free-cash flow.
Barron's said that M&F trades cheaply due to its declining core check business, as electronic payments grow in popularity among consumers.
Perelman has led M&F shares up from a low of $2 in 2002, using the company for debt-financed acquisitions, however the company's third-quarter results scared investors due to the weakness at Harlan Clarke.
Barron's wrote, "There admittedly are reasons to be wary of M&F, but the company is in good financial shape. Operating profit of $241 million easily covered interest expense of $90 million in 2010's first nine months. Net debt of $1.9 billion equals less than four times estimated 2010 pretax cash flow of $500 million. The debt load, in short, is sizable but manageable."
Shares of M&F are up 9.65 percent to $23.51 in midday market movement on Monday.
Shares of M&F are trading under four times the company's 009 earnings of $6.11 per share, while through the first nine months of 2010 it has earned $4.81, on pace for more than $6 per share again.
The stock is also valued at just two times the company's annual free cash flow.
The holding company is controlled by billionaire Ronald Perelman, and is a leading maker of checks, as well as the licorice extract used to flavor menthol cigarettes.
Perelman owns 43 percent of the company, and is M&F's chairman. Barron's noted that one bull sees Perelman ultimately could buy out the remaining shares of the company. M&F has a current market value of $425 million, while its public float is $250 million.
If Perelman were to buyout the company for $385 million or $35 per share for the publically held stock, he would be able to fund it with approximately $200 million in annual free-cash flow.
Barron's said that M&F trades cheaply due to its declining core check business, as electronic payments grow in popularity among consumers.
Perelman has led M&F shares up from a low of $2 in 2002, using the company for debt-financed acquisitions, however the company's third-quarter results scared investors due to the weakness at Harlan Clarke.
Barron's wrote, "There admittedly are reasons to be wary of M&F, but the company is in good financial shape. Operating profit of $241 million easily covered interest expense of $90 million in 2010's first nine months. Net debt of $1.9 billion equals less than four times estimated 2010 pretax cash flow of $500 million. The debt load, in short, is sizable but manageable."
Shares of M&F are up 9.65 percent to $23.51 in midday market movement on Monday.
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