Multi-Color Corp. - Value


Multi-Color Corporation ( LABL ) has been enjoying enhanced earnings momentum due to upbeat first quarter results and attractive acquisitions, helping this label solution provider achieve a Zacks #1 Rank (Buy). In addition, with a P/B of just 1.28 and a P/S multiple of 0.56, this stock is an attractive pick for value investors.

A Good Beginning to Fiscal 2013

Multi-Color announced fiscal first-quarter results on August 7 with adjusted earnings per share of 55 cents surpassing the Zacks Consensus Estimate by 10%. The better-than-expected results were primarily aided by robust top-line growth. In the year-ago quarter, EPS was 66 cents.

Net revenue surged 64.0% year over year to $165.0 million, mainly benefiting from its April acquisition of Scottish wine and spirits label maker Labelgraphics Holdings for $24.6 million. Organic net revenues inched up 2%, thanks to a favorable pricing and sales mix.

Adjusted gross profit advanced 41% to $31.4 million while operating income expanded 31% to $18.7 million, as a result of the acquisitions partially offset by unfavorable currency impact. Adjusted SG&A expenses also spiked 60%, due to the Labelgraphics acquisition.

Earnings Momentum Moving Uphill

Over the last 30 days, the Zacks Consensus Estimate for 2012 increased 3.9% to $2.13 per share with two of three estimates revised upward. This implies a year-over-year growth of about 15.0%. For 2013, one of 2 estimates moved higher, helping the Zacks Consensus Estimate improve 6.8% to $2.35. The estimate for 2013 represents a year-over-year increase of approximately 10.5%.

Impressive Valuation

In addition to low P/S and P/B multiples, the stock looks attractive with respect to a forward price-to-earnings (P/E) multiple of just 9.41. A P/E below 15.0, a P/S ratio less than 1.0 and a P/B ratio under 3.0 generally suggests a value stock. Additionally, it currently enjoys a fabulous dividend yield of 1.00%. Therefore, in addition to being a value stock, the company also offers a steady income opportunity.

Batavia, Ohio-based Multi-Color is a label manufacturer with a market capitalization of approximately $322.7 million. The company serves leading producers of home and personal care, food and beverage, wine and spirit, and specialty consumer products. Multi-Color was established in 1961 and primarily competes with Valassis Communications Inc ( VCI ) and Schawk Inc ( SGK ).

MULTI-COLOR (LABL): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: LABL

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