CSS Industries Inc (NYSE:CSS) is another particularly cheap stock in the All Investable Screener, with an acquirer’s multiple of 6.2. It has a market cap of $278 million; $106 million in cash and equivalents, and no debt, giving it an enterprise value of $172 million; and it has generated $28 million in operating earnings TTM. It trades at book value and a slight premium to tangible book value and generates an FCF/EV yield of 13 percent. It pays a 2 percent dividend, and, with its payout ratio at 35 percent, can easily sustain it. It’s run up over 7 percent over the last 5 trading days, but remains deeply undervalued. Revenue has been wilting, and that’s why it’s cheap.
CSS is a simple business that makes “occasion and seasonal products” sold to mass market retailers. Occasion and seasonal products include decorative ribbons and bows, boxed greeting cards, gift tags, gift wrap, gift bags, gift boxes, gift card holders, decorative tissue paper, decorations, classroom exchange Valentines, floral accessories, Easter egg dyes and novelties, craft and educational products, stickers, memory books, stationery, journals, notecards, infant and wedding photo albums, scrapbooks, and other items that commemorate life’s celebrations.
The company has been buying back stock and has authorized an additional buy back:
PHILADELPHIA, May 19, 2015 (BUSINESS WIRE) — CSS Industries, Inc. CSS, +0.03% today announced that its Board of Directors has authorized an additional buy back of up to 500,000 shares of its Common Stock at prices and pursuant to other terms and conditions that the Company’s officers deem appropriate. Share repurchases under the program may take place through open market purchases or privately negotiated transactions. There are 9,343,753 shares of the Company’s Common Stock presently outstanding. Any such buy back is subject to compliance with applicable regulatory requirements and relevant covenants in the Company’s credit facility.
Here are the summary financials:
| TTM | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 313 | 313 | 320 | 364 | 385 | 451 | 448 | 482 | 498 | 531 | |
| Gross Margin % | 32.5 | 32.5 | 32.2 | 30.0 | 29.0 | 25.4 | 24.7 | 26.2 | 27.6 | 25.7 | |
| Operating Income | 27 | 27 | 28 | 28 | 26 | 9 | -31 | 28 | 39 | 38 | |
| Operating Margin % | 8.5 | 8.5 | 8.7 | 7.8 | 6.7 | 1.9 | -6.9 | 5.9 | 7.9 | 7.2 | |
| Net Income USD Mil | 17 | 17 | 19 | 15 | 16 | 6 | -24 | 17 | 25 | 24 | |
| Earnings Per Share | 1.80 | 1.80 | 1.99 | 1.59 | 1.61 | 0.58 | -2.46 | 1.70 | 2.31 | 2.19 | |
| Dividends | 0.63 | 0.63 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.56 | 0.48 | |
| Payout Ratio % | 35.0 | 33.8 | 31.3 | 39.0 | 119.4 | 103.9 | — | 35.3 | 24.2 | 23.8 | |
| Shares Mil | 9 | 9 | 9 | 10 | 10 | 10 | 10 | 10 | 11 | 11 | |
| Book Value Per Share USD | 28.92 | 29.19 | 27.92 | 26.67 | 25.91 | 24.21 | 24.09 | 26.99 | 25.54 | 24.26 | |
| Operating Cash Flow | 33 | 33 | 28 | 30 | 26 | 32 | 49 | 28 | 42 | 55 | |
| Cap Spending | -4 | -4 | -5 | -4 | -4 | -3 | -4 | -14 | -8 | -5 | |
| Free Cash Flow | 29 | 29 | 23 | 25 | 22 | 29 | 44 | 14 | 33 | 50 | |
| Free Cash Flow Per Share USD | — | 3.15 | 2.44 | 5.36 | 4.62 | 2.98 | 4.59 | 1.38 | 3.04 | 1.85 | |
| Working Capital USD Mil | — | 194 | 188 | 175 | 163 | 147 | 131 | 114 | 136 | 188 | |
Source: Morningstar
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