Thursday, August 9, 2007

Insteel Industries Inc.

Insteel Industries Inc. is a NASDAQ listed security that has been trading in a range between $15.82 and $22.46 over the past year. With 18,281,260 shares outstanding, a recent price of $19.99 gives a total market capitalization of $392,133,041. While there are certainly larger companies, Insteel Industries Inc. has definitely earned its place in the pack. Last year, Insteel Industries Inc. created $1.59 in earnings for every share outstanding.

Insteel Industries Inc. is currently priced by the market at 12.80 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share in excess of $1 a share, Insteel Industries Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.