giofranchi Posted September 28, 2015 Share Posted September 28, 2015 A small cap which has been a great compounder since Mr. Sullivan (62) took over in 2006. Of course, I like its sector very much, and I think the opportunities for growth, both organic and through acquisitions, clearly are there for the foreseeable future. A bit pricey at 25x next year adjusted EPS, but the quality of management and business might justify a starting position, to be increased if the stock trends down. Cheers, Gio Mesa-Presentation-23-Aug-2015.pdf Link to comment Share on other sites More sharing options...
berkshire101 Posted September 28, 2015 Share Posted September 28, 2015 I owned the stock a while back. Very disappointed in myself that I sold. But it was a small percentage of the portfolio at the time. Hope to be able to buy again at a fair price hehe. Link to comment Share on other sites More sharing options...
AJDelphi Posted September 29, 2015 Share Posted September 29, 2015 I really like this business too. I've been following it for probably 4 years or so and actually met with Dr. Sullivan for about a half hour when I was out in Denver. He impressed me very much when I asked him about his acquisition strategy. He likes to buy companies that operate in regulated markets, where they provide some type of quality control test that is mandated by the FDA, OSHA or some regulatory body. Ideally in a market with few competitors. He seemed to be very picky about the price he pays and didn't seem to have a large ego either. My one knock on the company is them paying a dividend with how they have compounded earnings since Sullivan took over. It's is only $2.1 Million, but I'd rather let that keep compounding. Would love to invest in the business but at a MUCH MUCH lower price. Link to comment Share on other sites More sharing options...
giofranchi Posted October 15, 2015 Author Share Posted October 15, 2015 Mesa Laboratories In A Small Niche, High Margin Business http://seekingalpha.com/article/3573636-mesa-laboratories-in-a-small-niche-high-margin-business Cheers, Gio Link to comment Share on other sites More sharing options...
netnet Posted October 16, 2015 Share Posted October 16, 2015 So on brief inspection, it appears to be a good company, excellent non-dilutive growth, good ROE, and good M&A skills. So to me the questions are: is the probability that it will continue growing at an acceptable pace? What is/are the best metric(s) to judge the company What is a fair value? What would make this a mistake? My first cut on the above. Well they have grown at excellent rate so far, with experienced management. The balance sheet looks good. So I think they should be able to grow at =>15% per year, which is less than their current rate. (I'm 80% sure on 15% or better) My guess is that the best metrics are ROIC, given their acquisition history as the major driver of their growth, ROE, revenue growth, price/cash flow. (I don't like their G&A numbers trending up so fast, unless this is in anticipation of growth.) Fair value, well if they can grow at the same pace as the past then I would like it to be cheaper, but it may never get cheap, so I would say would be about EV/EBITDA of 17, just slightly below of current of 18. What would make this a mistake. Management team does not execute, i.e. there are not enough acquisitions or they botch them. So awful regulatory blowback with sever liabilities. They do have an excellent history of acquisitions though... any thought gio and others?? Link to comment Share on other sites More sharing options...
giofranchi Posted October 19, 2015 Author Share Posted October 19, 2015 any thought gio and others?? Well, personally I think they have lots of room to grow in an industry that I like a lot. As they have already done with their newly acquired cold chain business, they might be able to look beyond their traditional business of medical instruments and biological indicators. Its management is proven and still young enough to go on doing what they know pretty well for a long time. I think MLAB definitely is what I am always looking for: a great capital allocator at the helm of a great business. Consequently, I think we will see both organic and inorganic growth for many years to come. Price is my greatest concern: I think I’ll do what I usually do, when I like a business very much, but I think it is pricey: I am making an initial investment, leaving lots of room to average down. If its multiple contracts, I’ll buy more. If it doesn’t, I’ll still be able to participate in the growth of the company. Cheers, Gio Link to comment Share on other sites More sharing options...
jschembs Posted January 17, 2016 Share Posted January 17, 2016 I really like this business too. I've been following it for probably 4 years or so and actually met with Dr. Sullivan for about a half hour when I was out in Denver. He impressed me very much when I asked him about his acquisition strategy. He likes to buy companies that operate in regulated markets, where they provide some type of quality control test that is mandated by the FDA, OSHA or some regulatory body. Ideally in a market with few competitors. He seemed to be very picky about the price he pays and didn't seem to have a large ego either. My one knock on the company is them paying a dividend with how they have compounded earnings since Sullivan took over. It's is only $2.1 Million, but I'd rather let that keep compounding. Would love to invest in the business but at a MUCH MUCH lower price. When you met with him, did he discuss how they determine price in M&A, or was it more about the overall M&A strategy? Just curious how disciplined they were/are on acquisitions. Link to comment Share on other sites More sharing options...
bci23 Posted January 18, 2016 Share Posted January 18, 2016 I really like this business too. I've been following it for probably 4 years or so and actually met with Dr. Sullivan for about a half hour when I was out in Denver. He impressed me very much when I asked him about his acquisition strategy. He likes to buy companies that operate in regulated markets, where they provide some type of quality control test that is mandated by the FDA, OSHA or some regulatory body. Ideally in a market with few competitors. He seemed to be very picky about the price he pays and didn't seem to have a large ego either. My one knock on the company is them paying a dividend with how they have compounded earnings since Sullivan took over. It's is only $2.1 Million, but I'd rather let that keep compounding. Would love to invest in the business but at a MUCH MUCH lower price. When you met with him, did he discuss how they determine price in M&A, or was it more about the overall M&A strategy? Just curious how disciplined they were/are on acquisitions. I listened to the CEO present a few months ago and i was really impressed with him and the quality of the business. Then I pulled up the valuation and became significantly less excited but I continue to follow the company. I don't remember many specifics around their M&A strategy but their track record says a lot about how they think and the value they've been able to create. The CEO did say he is committed to maintaining 18% net income margins as they continue to grow via their M&A strategy. 60% GP rate is their target as well. Link to comment Share on other sites More sharing options...
AJDelphi Posted January 18, 2016 Share Posted January 18, 2016 I really like this business too. I've been following it for probably 4 years or so and actually met with Dr. Sullivan for about a half hour when I was out in Denver. He impressed me very much when I asked him about his acquisition strategy. He likes to buy companies that operate in regulated markets, where they provide some type of quality control test that is mandated by the FDA, OSHA or some regulatory body. Ideally in a market with few competitors. He seemed to be very picky about the price he pays and didn't seem to have a large ego either. My one knock on the company is them paying a dividend with how they have compounded earnings since Sullivan took over. It's is only $2.1 Million, but I'd rather let that keep compounding. Would love to invest in the business but at a MUCH MUCH lower price. When you met with him, did he discuss how they determine price in M&A, or was it more about the overall M&A strategy? Just curious how disciplined they were/are on acquisitions. He did not give a very detailed response on that. And looking back, I didn't ask any probing questions on how he thought about price. He said that every acquisition must be accretive to earnings in the first year (I would hope so) and it has to have good profits. But, that's really all the additional insight I have. If the stock price was close to where I wanted to buy I would probably call him up and follow up on that question. Link to comment Share on other sites More sharing options...
Liberty Posted November 6, 2017 Share Posted November 6, 2017 Down around 14% on what looks at first glance to be a rough quarter: http://globenewswire.com/news-release/2017/11/06/1174987/0/en/Mesa-Labs-Reports-Second-Quarter-Results.html Revenues for the second quarter decreased six percent to $22,954,000 as compared to $24,409,000 for the same quarter last year. Operating income for the second quarter decreased nine percent to $3,648,000 as compared to $4,012,000 for the same quarter last year. Link to comment Share on other sites More sharing options...
netnet Posted November 6, 2017 Share Posted November 6, 2017 I never pulled the trigger on this and forgot all about it. Looks like it had a 30% drop in 2016; does anyone know what that was about? Re the current drop is this temporary or an indicator of deeper or persistent problems? Link to comment Share on other sites More sharing options...
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