Tuesday, August 7, 2007


MOD-PAC CORP. is a NASDAQ listed security that has been trading in a range between $8.00 and $12.50 over the past year. With 3,450,390 shares outstanding, a recent price of $10.12 gives a total market capitalization of $34,434,891. While there are certainly larger companies, MOD-PAC CORP. has definitely earned its place in the pack. Last year, MOD-PAC CORP. created $-0.86 in earnings for every share outstanding.

MOD-PAC CORP. is currently priced by the market at 0.00 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 below $1 a share, MOD-PAC CORP. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.