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Sunday, October 16, 2005

Moro Corporation (MRCR)

Moro (website), a construction materials and HVAC business, has gone dark. They issued a 15-15D on Dec 22, 2004. Their last quarter showed them to have a reasonably healthy balance sheet, and profitable. Gross margins were around 18%, net income above 3%.

David W. Menard, 66, an investment banker, is Chairman, CEO, CFO, President, chief cook, and bottle washer. He owns about 70% of the company.

They've been on an acquisition binge. Whether this is good or not, I don't know. But they profess to have a value investing mindset, which is good but not sufficient.

The stock is selling for 87 cents. They're on track to earn 20 cents in 2005, which would give them a P/E of less than 5.

They do post results, but pink sheets and Yahoo don't save them long enough to see Q1 results, just Q2 results

I'm not investing in them. It sure is wonderful to be able to pass on stocks with a P/E of less than 5.

Hi Bruce -

You do some great work on these microcap stocks. I've been working with Pink Sheet and OTC stocks a bit myself. You can see my work at Fat Pitch Financials.

You might be interested in some of my findings. I've been focusing on risk arbitrage opportunities that have come about as a result of many these companies going private.

I'm also sponsoring a blog community event in November on value investing. I'm hoping to provide articles each day in November from as many bloggers as possible with there best ideas for improving investor skills, and of course returns.

I couldn't find an email address for you on your site. Please use my contact form at Fat Pitch Financials or email me at george -at- fatpitchfinancials -dot- com. I'd love to exchange ideas with you and maybe even work together with you on researching microcap stocks.

Thanks for the kind words. You'll notice that my approach to this blog is almost entirely for taking notes for my own personal consumption (I have a terrible memory). I don't discourage anyone from reading this blog and I certainly welcome comments, especially pointing out errors or bad judgement. But I don't plan to participate in any general blogging activities. I posted my reading list, which was an updated version of the one I sometimes post on Motley Fool. I also posted my rambling about mistakes, which was mostly for my own benefit, if you can believe that.

Charles Darwin supposedly said that you must write things down, especially unexpected things, within a very short timer period or you'll forget them. I mentioned Voyage of the Beagle in my reading list and it's a great thing to read (also the various stuff in Wikipedia). I believe it's important to constantly improve on rigor and good methods. In writing these things down, I can see where I fall short much better than keeping less explicit or public notes.
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