#113: Trey Henninger; Northfield Precision Instruments Corporation (NFPC); A Cheap Dark Stock
Aug 3rd, 2020 by Eric Schleien
- Northfield is an industrial manufacturer which means it is not immune to cyclicality in the economy. With the current recession, we should expect earnings in 2020 to be lower than in 2018 and 2019. They are likely considered an essential business, so I doubt they would be drastically affected. However, a dip in earnings is both foreseeable and expected. Yet, I expect that earnings will grow again after this recession ends to exceed the 2018 high in earnings.
- They are highly illiquid. It is difficult to buy shares in the market. It took several months for me to acquire my full position. I think liquidity is largely constrained because current large shareholders are unwilling to sell at such a low price while the profitability of the company continues to improve.
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Disclosure: Eric Schleien and some SMA clients of Eric Schleien through GSCM own shares of NFPC. Nothing here is investment advice. Do your own due diligence.