Wednesday, September 9, 2015

Seeking Alpha: Multi-Color Remains Focused On A 'Rinse And Repeat' Business Model

I wouldn't say that label manufacturer Multi-Color (NASDAQ:LABL) is exactly toiling away in obscurity, as it has some big name institutional owners and sports a pretty healthy multiple, but this isn't the kind of business that typically attracts a lot of investor attention. That's fine as far as I'm concerned; labels aren't going away anytime soon, and Multi-Color still has a significant opportunity to consolidate the industry, improve its asset efficiency/utilization, and upgrade its product mix.

I believe that the Street has these shares more or less fairly valued today. I do believe that ongoing consolidation could offer some upside to my mid-single digit long-term revenue growth estimate, while better margins could likewise drive better free cash flow generation, but I already factor in what I think is a meaningful trajectory for self improvement. The company's issues with financial controls are a risk factor, particularly given the extent to which the company leans on M&A, but management does seem to be addressing this problem.

Read more here:
Multi-Color Remains Focused On A 'Rinse And Repeat' Business Model

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