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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