Paul Mueller Co. (MUEL)

[AskMuncher]

$MUEL Letter of Intent Terminated Between Paul Mueller Company and Subsidiary, Mueller Field Operations, Inc.
Press Release | 12/30/2020
SPRINGFIELD, Mo., Dec. 30, 2020 (GLOBE NEWSWIRE) -- Paul Mueller Company, Inc. (OTC: MUEL), a global stainless steel processing equipment manufacturer, today announced the mutual agreement to terminate the letter of intent dated December 11, 2020, pursuant to which Paul Mueller Company was to sell its entire equity interest in its wholly-owned subsidiary, Mueller Field Operations, Inc. (MFO) to the management of MFO. MFO will continue to provide its customers with complex, on-site tank fabrication and other field-installed equipment as a Paul Mueller Company subsidiary.

For additional information about Paul Mueller Company, MFO, or any of the products and services they provide, please go to http://www.paulmueller.com.

Press Contact: Jay Holden | Paul Mueller Company | Springfield, MO 65802 | [phone]

[e-mail] | http://paulmueller.com

[ZachBuffett]

I think they are diversified that it won't hurt. What they lose in over-the-road, they will make up in expense savings.

And I think there's a forecasted turnaround for Ag, which should bode well. This beautiful little article was posted yesterday:
http://www.agweb.com/article/global-dairy-picture-brightens-domestically-naa-wyatt-bechtel/

[ZachBuffett]

Beautiful report today. Great earnings, $7 for the year makes it around a 4 P/E

http://finance.yahoo.com/news/paul-mueller-company-announces-earnings-200700134.html

Being proactive about managing their pension liability is a huge plus imo:

On March 18, 2016, the Company announced their intent to offer voluntary one-time lump-sum payments to former employees who have not yet begun drawing a benefit from one of the pension plans covering employees who are represented by a bargaining unit and employees who are not represented by a bargaining unit. Those eligible to receive the voluntary offer are any participants in the plans who are no longer employed by the company by May 6, 2016, and have not yet begun drawing a benefit from the plan. The lump sum payments will be distributed on or about October 1, 2016.

And a $3 million buyback. Awesome.

On March 18, 2016, the Company announced a repurchase program of up to $3 million of the Company’s common stock. The stock repurchases may be made from time to time in the open market, in compliance with a Rule 10b5-1 share repurchase plan adopted by the Company, or in privately negotiated transactions in compliance with applicable state and federal securities laws. The timing and amounts of any repurchases will be based on market conditions and other factors including price, regulatory requirements, and capital availability. The program does not require the repurchase of any minimum number of shares and may be suspended, modified, or discontinued at any time, without prior notice.

Would have been nice to grab some of those inexplicable $23s while they lasted.

[Dgrcks]

Any thoughts on how/if falling energy prices will impact them? I flipped through their annual reports but couldn't find any kind of break-out on COGS to see if there may be a positive margin impact.

I imagine they could take a hit on sales with their over-the-road oil tankers. Found this in the '13 annual report.

"The lone exception to domestic profitability in Industrial Equipment was our over-the-road trailer product line. We
chose, in 2013, to continue investing in additional models of trailers, and in our second year of operations, we are now
producing five designs. The designs include a 200bbl crude oil trailer, an insulated two trailer crude oil set or train, a
refined fuel or gasoline trailer, a sanitary or food products trailer, and a fertilizer trailer."

That segment looks to be 14% on their '13 income. With E&P companies cutting back on capital expenditure it makes me a little nervous. But at least there are still plenty of producing wells out there regardless of where future rig counts go.

[dffhogs]

I was wondering why we got the big black candle on the 21st... The stock was reflecting the loss... RIP

http://stockcharts.com/h-sc/ui?s=MUEL&p=D&yr=0&mn=1&dy=0&id=p45015444656

[ZachBuffett]

Rest in peace Paul Mueller- founder and namesake of the company, at an impressive 99 years old.

http://www.ky3.com/news/local/remembering-longtime-springfield-industrialist-paul-mueller/21048998_30829612

http://www.news-leader.com/story/news/local/ozarks/2015/01/20/paul-mueller-founder-namesake-company-dead/22061181/

http://www.ozarksfirst.com/story/d/story/founder-namesake-of-paul-mueller-company-dies/27769/NAwyyrd3ZEiWZxi1yXKlxQ

http://www.kspr.com/news/local/Springfield-businessman-Paul-Mueller-dies/21051620_30813144

[SSKILLZ1]

I'm surprised too, but I think it has to do with alot of people just look at the bottom line #'s and really don't do any analysis further. And the bottom line #'s were not impressive this quarter if you do not take out the one time charges like and informed investor should. Problem is alot of small investors are not informed, in fact most are like sheep and they do get slaugtered a lot if they put 1/10th the time in the portfolio building as they do in what ever really interest them they would do fine, but that is also a good thing for us. I mean I remember MUEL the day after the earnings it went down almost $4 that day at one point on a good earnings report, because people don't know how to read. Anyone who sold at that point with the stock at $50 and still very cheap doesn't look too bright if they sold at $44-45. Sure could something go wrong with the company. Absolutely. But right now I believe FV is significantly higher then $50 in my opinion. Time will tell. It's my 5th largest position in my portfolio for what it is worth. All is just my opinion, and I could always be wrong though.

[natstocks]

Surprised this one's been staying so cheap.

[Rawnoc]

A Challenge To All: Find Me A Cheaper-Looking Microcap Than Paul Mueller Company

http://seekingalpha.com/article/2496125-a-challenge-to-all-find-me-a-cheaper-looking-microcap-than-paul-mueller-company

[ZachBuffett]

Or that one of the funds wanted to drive it down and buy more. It was a very interesting day. Volume was massive again, one of the largest two period days in the last decade of the stock. May is already over monthly average volume after 3 days of trading.

But what was interesting was the action of market maker BKRT- Buckman, Buckman & Reid. From what I understand it is institutional. It pushed the ask down the entire day, in a strange way. It would push down and back off like .50, then push down again, and back off. Until it sat at 36. Then it backed off completely back up to 38, and then NITE shows up with a 5000 share bid at 36 toward the end of the day. Note that that represents $180,000, and a much larger order than I have ever seen.

Also, there were quite a few more market makers in general here than usual.

Now, I am not the most versed in MM activity, but this was very unique movement for MUEL. And of course, I bought more under 36, gladly. This pullback was interesting to see, and I'm not complaining.

[Huckleberry Pieman]

Could be one of the funds wanted to cash out. The stock has run from 17 not too long ago. It will be interesting to compare shares currently held compared to last quarter. Someone wanted out.

[triadtreats]

Nice unbiased post. Sorry to see the drop, hope it recovers for all. The key word is expectations, which sucks when they mask otherwise good results. If this company didn't deregister, I think the "private company" discount of about 30%+ wouldn't be a factor here, and maybe the price drop would have been mitigated. I like what I see here, and will follow it while wishing you success. I do have people ask me about investing ideas, so while I won't invest in companies that deregister, I do pass good ones along.

While it is great they release detailed financials, one thing that is missing (unless I missed it), is the significant holders list. Last one I saw was in their last filed proxy statement. Royce funds did file 13/F recently though.

You or Mike have any ideas about the distribution of shares now? Like PFHO, I always wonder who sell while there seems to be compelling value.

Last list of 5%+ holders were:
Name and Address

(1) Paul Mueller
1600 West Phelps Street
Springfield, Missouri 65802

(2) Royce & Associates, Inc.
1414 Avenue of the Americas
New York, New York 10019

(3) First Manhattan Co.
437 Madison Avenue
New York, New York 10022

(1) 106,557
(2) 126,350
(3) 73,976

[Rawnoc]

Not quite. Earnings were disappointing, even though solid, versus expectations.

I think the winter weather had something to do with it as international net income was strong but domestic was terrible due to poor margins. Q2 will probably be a much higher EPS imo.

[ZachBuffett]

Earnings out, market isn't a fan. I am a lot less concerned, picked up more in the 30s. Even if margins run lower throughout the year, this is still undervalued. Revs, book, backlog all up. LTD way down. I'm still a buyer.

Everything is relative. 46m revenue, 1.2m profit in one quarter, and under 50m market cap? And these numbers are the downside?

[beach_trades]

What a P&D Before Earnings

[ZachBuffett]

MUEL.. $46.00 A good writeup.

We may see Q1 earnings tomorrow, if there isn't another short delay.

[Rawnoc]

An Underappreciated Turnaround At Paul Mueller

http://seekingalpha.com/article/2181783-an-underappreciated-turnaround-at-paul-mueller

[jasonak]

MUEL traded below my bid.....I got bypassed on 40.10 bid for some reason trying to add to one of my largest positions.

[Steveadl]

Definitely a solid company. Looking to start a position here, though I'm hoping price will ease back after excitement or earnings settles down.

[ZachBuffett]

Full 2013 Annual Report is now available on their site: http://www.muel.com/pdfs/AnnualReports/2013MuellerAR3-21-14.pdf

There's been solid buying volume, with last week being the third highest week of volume in the past 5 years. All in the right direction.

[ZachBuffett]

MUEL.. $41.00 +$8.00 +24.24% Great open here after the report.

A $100,000 buy just went through. Impressive.

[SSKILLZ1]

I don't think I dismissed your posts and certainly it is not my intention to silence a different opinion, that was not what I was thinking or trying. I want people to have different opinions, I'm not always right, that is how we learn.

What I was trying to do is explain to you my rebuttal case on MUEL, and give some advice based on the questions you have been asking me lately on a broader strategy advice. I guess I can see where you see it as criticism, but that also wasn't my intent, it was just advice. I don't want to silence you or anyone, and I welcome opinion different then my own, and I don't mind if you ask me questions, and hope you continue to do so if you have them. I don't need people to agree with me all the time or at all, the whole post was part advice broader strategy, as I feel there is a fine line between diligent DD (which I always recommend) and constantly looking for wholes in a case of every investment (Which may lead to indecision or an inability to take any risks.) And the other part was me simply explaining the MUEL a year ago and Muel now is not the same thing, I stated book value with the improvement in the balance sheet and the rise in the backlog. So Hope this helps, but I just want to be clear my post was intended to be advice not criticism, and a defense of what has changed in MUEL over the last year that makes is worth a lot more in my opinion.

[swampboots]

Not fair ( but who am I to say?) I would not waste my time asking you questions if I thought you were not an exceptional sleuth, and when I do not follow many of your picks it has been my loss. I am just telling you what I see that are my negatives. Sorry I will never give you my opinion, I will just rely on your remarks and act accordingly as obviously you earned the privilege of dismissing my posts.

[SSKILLZ1]

MUEL

I have to honest I think you want to find negatives on everything (And I have no problem with that, if your position is your bearish on everything), at least it seems that way, because everything has a negative, sure if we look hard enough we can find a reason not to invest in any stock or any investment. You can go on about REITS with IR, or preferred with interest rate rising, or stocks, because they are up so much, and trade higher then where they were 2 years ago. That would be the case of say you wouldn't buy PFHO at $8 because it was .80 a year, but it goes to $30, because you missed out on .80. Countless other microcaps over the last couple of years would be an example as well, the question to me always is whether it is a great investment now, not where the stock price is on any security a year ago versus now.

Muel Trades almost 30k dollar volume a day (which is more then a lot of other stocks we talk about), and it went from $13.50 to $33 yet, so the idea that it won't move on good news is not true, I'm also not saying muel should trade at a 15 pe I'm saying it should trade at a pe of 7, even a pe of 5 get us to about $50. And Your paying a ton for MUEL now I might add what are we looking at a PE of 3 times (q4 annualized). The balance sheet also sucked a year ago by the way, so it is immensely more valuable now in my opinion. The backlog is up about 40% y/y so to me the argument that this is the same company a year ago, when book value Is up about $26 over the last year, the backlog is up 40%, and business has never looked better is simply not true. But that is what truly makes a market. Hope this helps. All is just my opinion, and I could always be wrong though.

[swampboots]

In my humble opinion MUEL is an anthropologic relic,
and a true source of a computer mining Cos' cookie factory to create a subset of highly patient long term investors eager to get no dividends or liquidity and are built of the staunch stuff needed to follow a stock so rarely that they never miss the 3 week interval when only 2000 shares change hands .
But I personally would pay for the data embracing the buyers of MUEL stock when it traded at $13.50, less than a year ago at less than 1/2 its current price. I would do so with a giddy eagerness as I would find it immensely valuable to identify a clever bunch who were smart enough and confident enough to realize that the cost for MUEL to get their revenues in that quarter, included some nonrecurring charges which were masking MUEL's net profit, ONLY during that odd quarter.

[ZachBuffett]

Hmm, well I'm not personally familiar with IB, but that seems like a pretty arbitrary restriction. I would call them and find out, because it is definitely a broker restriction. In the past, I've had to call in orders when a stock is restricted, maybe that is an option. It's weird they would choose Mueller, though. MUEL used to be a fully reporting company.

Also, a dollar spread and volume of a few hundred shares is deceptive if you are used to watching sub dollar stocks like most of us are, but MUEL is actually pretty liquid if you consider the dollar volume and spread percentage. Much of the past few weeks has seen a spread of 32/33 or 33/34, with daily volume in the tens of thousands of dollars. Translate it to pennies, and it would be a spread of .32/.33 with volume of 80,000. Not bad, really. Even a spread of .32/.35 wouldn't be ridiculous.

I hope you have luck on Monday. The IB restriction seems suspect, hopefully you can work through it.

[ZachBuffett]

A good article about Paul and the founding of the company:

http://www.news-leader.com/interactive/article/20140316/BUSINESS04/303160021/Paul-Mueller-Springfield-stainless-steel-tank

He's still around at 98 years old.

[ZachBuffett]

To add to what SSK said, on top of the fact that there were extra expenses last year, they improved margins through the entirety of 2013. We will find out more about this in the full annual report, but it could be a turn to profitability in the industrial segment. For a long time, the industrial portion of the company has been weighing on earnings; it hasn't reported a gross profit since 2007. They have been improving since 2010, so this is the year we could see a contribution to income from that large segment.

[SSKILLZ1]

MUEL

if you are referring to the cost side of the income statement, remember there was a huge charge with the ex ceo leaving last year. Number 2 GM stunk in q4 last year and was back to historical norms this year and before q4 last year, looks like q4 was a GM anomaly that was quickly corrected by new management.

They earned $2.39 fully taxed, if you ignore charges, backlog was actually slightly up sequentially. I expect sales to be similar to q4 levels in q1. And I expect a $9-10 Fully taxed run rate in 2014. Now some will say why are you so excited you were predicting a $8-9 run rate before this quarter, and that is true, But this $9-10 runs rate is much higher quality because it is fully taxed versus lightly taxed in my opinion.

[swampboots]

Why has MUEL reduced its cost so much, as only 2 million more revenues 2012 t0 2013 ($ 49,754,000 $48,865,000 ) . but multiple times net makes for nice eye candy but what did I miss as current price double its year to year lows?

I am only asking because I have a car I would like to park which is full of cash.

[Axel]

I'm using IB. Here I always get something like "contract can only be closed". I have no problems buying other otc pinks like STBV but also had this message on one or two other triple zeros so I did not care much until now and did not investigate further. Also here I thought it's so illiquid it's better to move on but the Q made me come back and I would like to open a small position on monday.

[ZachBuffett]

Not that I'm aware of, other than just its classification as a pink sheet. Through what broker were you trying to buy? There have been no restrictions for me, and I've had issues with other OTCs.

[Axel]

I tried buying this a few days ago from my account but was refused. Is there something special about this stock or its listing?

[ZachBuffett]

Yes, I think that is a reasonable earnings estimate. Personally, I think that even a conservative valuation puts MUEL at a double digit P/E and a P/S closer to one, considering growth of sales and backlog, international positioning, and potential to return to reporting status and uplisting. That would be a triple.

But we should definitely be going higher. High five.

[SSKILLZ1]

I'm excluding taxes and Gains. I annualized this quarter post tax and ex lifo gain get $2.39. I think they will be on a $9-10 fully taxed run rate in 2014, Hence I see double current prices in my opinion.

[ZachBuffett]

Haha 5 seconds late on my post. They sure are, did you see that book value?

Big gain on the taxes, but even without it, it would have been a great quarter. Revs came in higher, backlog is still up, I don't know if we can expect this high of earnings in 2014, but the stock is no-brainer half priced at the moment.

You said that a 7 P/E would double it, my calculations say that that is a triple, unless you were excluding the tax gains. I'm considering subscribing to iHub now, join you guys on the VMC board.

Good call, sir. Monday should be fun.

[ZachBuffett]

Numbers are out, and they are very good.

http://finance.yahoo.com/news/paul-mueller-company-releases-fourth-224226654.html

P/E just dropped to 2.1

[SSKILLZ1]

Well they posted results on Friday after the close. And they are excellent in my opinion. Apparently there was a LIFO gain number would of been .37 less if you exclude the gain so $2.39 is the number I would use I would also state that those are fully taxed number not like q1-q2-q3 is in my opinion.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=99252618

[ZachBuffett]

It would seem likely that we would see earnings AH today, by the company's historical timing, and the recent trend of reporting AH on Fridays. However, this interim CFO period makes it possible we won't see it for a little while. 2010's FY wasn't posted until April, but I doubt we will have to wait until then.

[ZachBuffett]

Tomorrow is MUEL's 45 year anniversary:

March 5, 1969: The Paul Mueller Company went public with an initial offering of 250,000 shares. Funds from the shares were used for capital expenditures at the company’s facilities in Springfield and St. Marys, Canada. The Paul Mueller Company is recognized as one of the leading manufacturers of stainless steel in the world. Springfield Leader & Press

http://www.news-leader.com/article/20140303/NEWS01/303030017/this-week-in-Ozarks-history

45 years later, only a million more shares outstanding. That's impressive.

[ZachBuffett]

Good response, I will have to look further into our tax rate, and the contraction of margins last year. Nothing to be concerned about at all, imo though. In the last decade, Q4 is actually the biggest quarter, both in revs and income. Take a look at 2011 for example, even without the tax benefit. There are other years with Q4 contributing as much as 35% to FY revs, and over 50% to income.

I'm actually looking more for further increased backlog again this quarter rather than seeing the revs come in that much higher.

[SSKILLZ1]

MUEL

SSK: MUEL looks undervalued and would soar if they got off the pinksheets. Their reporting is of 10K caliber, which is a big positive.

True but as you said there reporting has been quality of any company. I think the low PE is attached to the fact that Balance Sheet didn't look pretty several quarters back. This reminds me so much of dit several years back.

Tax rate was only 15% through 9 months, helped in part by foreign tax credits ... not sure how long that will last.

True but stock is too cheap. plus I think a higher earnings run rate is coming so earning rate may go up even with taxes.

Revenues were up less than 1% y/y through 9 months despite increasing backlog, so the backlog may be for long term delivery.

Look at it this way. Q4 backlog was the lowest hence sales were the lowest in q1. Sales from q2 and q3 were up from q1 but backlog was also up from q1, and q2 and q3 backlog was flat, and sales in q2 and q3 were flat sequnetially. With q3 Backlog up based on this pattern not hard to believe we will see something like 50 million in sales in my opinion.

Q4 revenues were strong last year, yet gross margin contracted so much (20% for Q4 versus 28% for the prior 3 quarters) that gross income was the lowest of the 4 quarters .... hopefully we won't get a repeat margin drop this year. Might have been due to year end accounting adjustments.

There were some one time charges Like the ex ceo leaving was a cost. SGA is waaaaaaaaaay down from last year due to effective cost cutting. Also GM were lower in q3 last year only 25% in q3 so problems were showing signs inq3, probably a spike in material costs at the ends of 2012, that caused a short-term negative in gm. I'm not worried but time will tell. All is just my opinion, and I could always be wrong though.

[researcher59]

SSK: MUEL (33.00) looks undervalued and would soar if they got off the pinksheets. Their reporting is of 10K caliber, which is a big positive.

I picked up a few shares after seeing your post on the VMC board and look forward to seeing the preliminary Q4 report - due out soon based on last year's 3/7 release.

A few points -

Tax rate was only 15% through 9 months, helped in part by foreign tax credits ... not sure how long that will last.

Revenues were up less than 1% y/y through 9 months despite increasing backlog, so the backlog may be for long term delivery.

Q4 revenues were strong last year, yet gross margin contracted so much (20% for Q4 versus 28% for the prior 3 quarters) that gross income was the lowest of the 4 quarters .... hopefully we won't get a repeat margin drop this year. Might have been due to year end accounting adjustments.

[bbotcs]

ZachBuffett: Gotcha. My MUEL order did not go off. Don't know what happened. I have to try again.

[ZachBuffett]

RE: The comments about the liquidity of MUEL. Like you said the share price is much higher and a small number of shares is already a large position.

It is deceptively liquid, actually. In a 3% trading range we have seen over 120 thousand dollars of volume in just a few hours. Granted, today is a high volume day, but the spread is never as big as it seems. When you spend your days looking at stocks under $1, a .50 spread naturally seems huge, but relatively it is tight here.

[ZachBuffett]

I can't send PM's, as part of my dedication to being cheap. Whenever you want to chat, you should shoot me an email at [e-mail].

[ZachBuffett]

Looks like the people who did their weekend DD after your table pounding are getting a good chance at 32 today. Huge volume.

I hope your health is holding up well lately, by the way. I think I remember you mentioning something.

[SSKILLZ1]

Have no clue what day, although it will happen at or before march 31rst. And there is a chance we could see there earnings as early as this week possibly. All is just my opinion, and I could always be wrong though.

[blindman28]

what day is the 10-k coming?

[SSKILLZ1]

MUEL

Repost from VMC, gives backlog data, which I think is painting a very beautiful picture for muel.

Backlog was in November 1rst Earnings PR. backlog info for every quarters is given in every earnings pr. as you can see backlog really took off in q3. Here's the thing flat sales is a $8-9 run rate increasing sales obvious means a higher run rate which I believe will occur. stock trade at a whopping PE of under 4 on a $8 run rate, and I'm expecting growth so hard to see where this trade doesn't work out. then again who knows a humbiling experience could be coming my way. time will tell. but the backlog trend also looks great, it is a bargain on sales being flat and if sales are starting to pick up, we will see. all is just my opinion, and I could always be wrong though.

Q4 (12) 47,929K
Q1 (13) 55,085K
Q2 (13) 55,111K
Q3 (13) 67,104K