Privet Fund Management LLC, an investment firm that manages investment partnerships focused on making event-driven, value-oriented investments in small capitalization companies, continues to add to its stake in Synalloy Corp. (SYNL, Financial).
The firm added 123,535 shares of Synalloy between March 28 and April 5 in nine transactions for an average price of $12.45 per share, according to the SEC.
Privet Fund Management now owns 1,004,732 shares of the company.
Synalloy has a market cap of $109.78 million, an enterprise value of $118.52 million, a price-book (P/B) ratio of 1.21, a price-sales (P/S) ratio of 0.78 and a current ratio of 2.98.
Synalloy is a chemical manufacturing company that operates in two segments, the metals segment and the specialty chemicals segment.
The company’s metals segment manufactures stainless steel and other alloy pipe and fabricates piping systems from stainless steel, carbon steel and other alloys.
The specialty chemicals segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils and chemical tolling manufacturing resources.
Synalloy is headquartered in Richmond, Virginia, with an additional corporate and shared services office in Spartanburg, South Carolina. Synalloy has been in business since 1945 and employs more than 450 people with operations in Tennessee, Georgia, Texas and South Carolina.
The company recently applauded the issuance of an executive order on improved duty collection by President Donald Trump on March 31.
The executive order, effective immediately, gives U.S. Customs and Border Protection 90 days to conduct a risk assessment for certain importers and develop a plan that will improve collection of antidumping and countervailing duties. Fraudulent practices have cost the U.S. billions of dollars in duty collection.
"This executive order will help our fight against unfair trade," said Craig Bram, CEO of Synalloy. "Importers are exploiting loopholes in our laws, and closing them is a step toward fairer trade practices and relief for our company, its employees and their communities."
As of May 2015, $2.3 billion in antidumping and countervailing duties remained uncollected for imports entered between 2001 and 2014.
According to GuruFocus, the company has a 4 of 10 financial strength rating with a cash-debt ratio of 0.01 and an equity-asset ratio of 0.64. Its Altman Z-Score of 3.22 indicates it is in the safe zone and is not in danger of filing for bankruptcy within the next two years. The company’s Beneish M-Score of -2.75 suggests it is not a manipulator of its financial statements.
The company has a 4 of 10 profitability and growth rating. It has an operating margin of -5.95%, a net margin of -5.12%, a return on assets (ROA) of -4.99% and a three-year revenue growth rate of -17.30%.
The company’s market price has gained an estimated 63% over the previous year.
According to the Peter Lynch chart below Synalloy is trading below its intrinsic value.
It is noteworthy that gurus Jim Simons (Trades, Portfolio), and Chuck Royce (Trades, Portfolio) added to their positions in the company during the fourth quarter. Since then the company market price has gained an estimated 23%.
Disclosure: Author does not own any shares of this company.
Start a free seven-day trial of Premium Membership to GuruFocus.
