We would love to hear your thoughts about our site and services, please take our survey here.
Hello from across the pond, I went to sleep on this stock after the CEO and CFO bought last year. IMO this is an undervalued company and I won’t be a bit surprised if it gets bought out. The 10 year bond corporate bond should be rising and that will greatly help the pension liability from my understanding. A low PE like Carclo’s with growing earnings and cash flow with rising inflation make it an even better buy at this price. Instead of a dividend it would be better in my IMO to plough money back into the business or buy back some shares of stock. The company may not be able to buy back shares though under the terms of the pension agreement. Hopefully we will see some more insider buying.
In 2017 the technical plastics division accounted for 70% of the underlying operating profit, 8.7 Mil of 12.4 mil. In 2017 the company earned 12.1 underlying earnings per share. If you assume 70% of the EPS came from the technical plastics division that would be a per share earning of around 8.5 pence per share in 2017. DYOR, that is my own figuring on a piece of scrap paper looking at page 4 of the annual report in 2017 , but I believe it reasonable to think that the technical plastics division can produce much more robust earnings in the future making this current price still really cheap. So you if you look at the potential earning power per share here, you can see the potential of major capital appreciation. Another benefit of carclo, you have a history of earnings to look back at.
The S & P 500 is only comprised now of 2.8% energy companies. Passive investing and SP 500 index investing has just exploded over the years, plus ESG investing has also impacted the energy companies. I think you can find some real value in energy. I bought RRC, range resources(trades on the NYSE) over the summer at less than $3 a share, it just hit $12. I would put a target on it at twice that. RRC sits on a behemoth NG gas reserve in Southwest PA. Analysts underestimate that in my opinion. My two cents only is if you do some research on energy companies here in the US, you will find some real winners. I also own Royal Dutch and Energy Transfer
Energy Transfer reaped a $1 billion extra profit a few months ago, they r an MLP. Trading at a low PE multiple. Tweedy Browne, a value firm I follow, opened a position in Rubis, a French MLP. The colonial pipeline over here in the US got shut down due to a cyber attack between that and the Texas freeze Nat gas supply and energy seem undervalued and under appreciated plus a lot of the flows went into the passive sp 500 company in the index, just my 2 cents, glad to hear some of you all are reaping some gains here with Carclo, it’s a great story
If you got in real early, nothing wrong with taking some profit, but shareholders of carclo got to be asking, who is buying?, what do they know?, and why buy now? Who bought last week and why? Schroeder’s
Interesting dynamic on the pension deficit, when yields go up, pension deficit goes down. A company can borrow now, lock in rates at all time lows, while Carclo is locking in contracts and reducing net debt.
DYOR though.
When the largest shareholder adds more and the RNS is released on Friday, that could be nice positive news for next week, this month(earnings will be released here someday), and long term-they have held shares for years and you could assume they intimately know they company. It’s a safe bet their are more funds and firms eyeballing Carclo too because of Carclo’s ability to generate cash ($100m in revenue-$40m in market cap) the demand schedule for Carclo’s products and on many metrics compared to their competitors- Carclo is cheap. I did some research and from what I could find (DYOR) that Consort, the company that put a buyout offer on Carclo was bought out by Recipharm and Recipharm was or is in the process of being bought out by a private equity firm. the possibility for capital appreciation IMHO is still here-a double or even triple. Stay tuned-
Frankseluk2,
I see they released an update, confirming my earlier post. The stock has a lot of room to run. The company is positioned well here and globally. They have a nice niche and those contracts will provide a solid stream of cash flow.
Went past the plant in Latrobe on Saturday, there was a sign that said “apply today, work tomorrow.” Also a building permit from the city was posted on a window, which is necessary when renovating or remodeling buildings. Positive signs of increasing production to meet the demand in this industry. The company mentioned the demand increasing in the annual and it looks like it’s ramping up, my average is .15 U.S. so I am sitting on some gains, it’s about .46 U.S. now, I would put a one year price target of $1.20 not to far away from what Consort threw out there in 2017.
Unlike many other chat boards, this board has some insight. IMO, Carclo offers major upside due to the technical plastics division, which can/should be able to increase revenue incrementally with the new contracts they secured, plus the demand for Carclo’s products should be robust. Consort expressed interest to buy out Carclo at 116 a share just a few years ago. The board didn’t even consider it.
Interestingly, I believe Carclo’s retirement debt obligations will improve a lot with rising interest rates due to the AA bond yields increasing, again intriguing from an investment strategy.
I believe some major new investors have taken a position here.
Duroc unloaded millions of shares and this company has a very small market cap. The price has went UP since then and I doubt it was retail investors buying all those shares.
Stay tuned, this could be a triple, or the stock could get hammered.
Here is an article from September 2020 noting Carclo’s production of parts for medical devices here in states.
https://www.latrobelaurelvalley.org/blog/the-neighborhood-newsletter-4896/post/member-spotlight-carclo-technical-plastics-26020
The buy volume has been steady, price to sales is something like .2 and I checked the numbers yesterday versus those in Carclo’s industry on the LSE- looks Real cheap, with a long runway.
The pension fund actually has a large amount of assets in it as well, it just got underfunded. I first learned about the technical plastics division as they are noted for their production here in PA. The aeronautical division has big time upside with the reopening of the economy.
Wonder who bought all of DUROC’s shares? Keep an eye out for the next disclosure that shows institutional ownership, this is on the LSE, but over here, the funds are copy cats so that will make things interesting.
I recently re-read Carclo’s annual report, last earnings report in November, and their RNS announcement on 12-23
Here are some positives & observations of mine:
Many (most from what I saw) institutions sold out over the summer, however, Carclo was deemed an essential business here in the US and most likely abroad as they are a maker to medical plastic parts essential for medical testing. Carclo worked out agreements with its 2 main creditors: the pension scheme and HSBC for 3 years.
Carclo sold their unprofitable LED division last year and the proceeds reduced the pension deficit & shored up liquidity some.
A long term (10 year) contract was signed 12-23-21. “At full rate production these contracts were expected to deliver annual incremental annual revenues of between $10m and $15m” These are subject to certain conditions of course. Tooling contracts already have been awarded and should show a modest increase on the next earnings report
Directors made share purchases in the months following that announcement
Another long term contract was reached as noted in their reports
The pension scheme has $176 million in assets, it’s a damn shame that the pension got so underfunded
Carclo has a global footprint and their market cap is very small compared to their growth prospects
DUROC unloaded millions of shares, but the price has only went up since.
The demand for the technical plastics is only going to go up and Carclo is positioned well
I suspect some bigger players are already watching
Good luck, I am in the U.S. and I am glad as hell I averaged down over the summer. I have held shares over 4 years
I drive by the plant on the way to and from work.
I live close to the Latrobe Plant. I have held shares for over 4 years and I bought more over the summer when the stock was on clearance. I have heard good things about the Technical plastics division for years, it has been busy over there and they secured some new contracts, long term too. I believe Carclo is ready to start posting some positive earnings, money is afloat here in the U.S. looking for a home, imho this is a good place to be for a retail investor because the mutual funds and the big boys May decide they want in or they want back in. Do your own research though, company has pension liability.
I tried to buy some more here in the states on the OTC pink slip market order didn’t fill, then I check and price just shot up 30% today. I canceled that order. I am not that surprised as I think good news is coming due to the market for medical supplies due to COVID-19 but no official news came out
I will keep watching closely
Does anyone know what would happen if the pension trustees and the company can not reach a deal? Would the retirees than get a big cut in their pension? If that is the case, it would seem like a good reason to work a deal. Also, With companies here in the United States getting major bailouts and loans, it would be a shame to see this company have to file a bankruptcy, I would think there would be a company that would scope this up on a buyout before that and that financing could be obtained somewhere.
Sitting back and waiting, hoping, for a day when I check the price and see a huge increase on some good news
Hopefully this does not end up a Chapter 11 bankruptcy, where the company will get to wipe out the common stock, and reorganize while continuing operations. My fear is that the institutions know that this company has a prepackaged Chapter 11 plan.
Perhaps a buyout could happen. For me this has been a learning experience as I am no expert in corporate finance. Would be nice to see the stock pop, the plant is busy and their sales should be strong in the plastics division. I took a Peter Lynch shot at this one.
I spoke to some guys that worked at the plant here and they said business at the plant was solid and growing. They mentioned plants in India and China and they said they believed the stock would recover. Now from their perspective business was great they mentioned the WIPAC was dragging results down. We didn’t discuss the pension issue and debt. This was before COVID and I felt confident that this was worth the risk so I increased my position here
I am learning a ton about stocks by investing here inCARCLO I appreciate the other responses
Hello, I live close to Carclo’s plant in Latrobe, PA. I noticed the business seemed to be thriving, I did a little research, even talked to some employees, and I bought some shares. I do not completely understand the company’s pension problem. What is the role of the pension trustees? How close do you think this company is to filing bankruptcy? I read some of the reports the company’s website and I know it’s on shaky ground with its debts, but can someone on here help explain the situation in more laymen’s terms and share their opinion. My plan is to hold long term, I have 8,500 shares so no big loss if I get caught holding the bag and the stock tanks.
Here is an article from a local paper near the plant.
This stock could end up popping, at this price I am picking up some more. Yes the pension debt is an issue, but long term contracts could be on the horizon, giving the company the ability to turn profit
https://triblive.com/local/westmoreland/westmoreland-county-company-turns-out-vital-parts-for-coronavirus-test-kits/
What is going on with this company? You would think they would have released there reports by now. The stock is trading OTC, I bought in a few years ago with high hopes. Keeping my fingers crossed for some good news, but the silence and no update from the company makes me wonder what is going on.
What I precipitous drop! I have been holding long term, why did it drop so low so fast?