3/13/2017

Overlooked Industrial Conglomerate, Jason Industries

Jason Industries (JASN) is an industrial global manufacturing conglomerate.  The company operates in the following four segments; finishing, seating, acoustics and components. Year ending 12/2016 revenue was $705,519,000.


Potential Catalysts/Investment Rationale :



Strong Insider activity, see details below.

Mispriced undervalued stock with a negative -54% 52 week stock price performance. Management is forecasting 64M to 67M adjusted EBITDA or around EV/EBITDA ~ 6 for fiscal year 2017.

Value based institutional shareholders with ownership at significantly higher prices.

Management projected fiscal year 2017 cost cutting with improving operational efficiency offering multiple levers to improve future results. A positive USA manufacturing regulatory environment could provide future benefits.

Proven and extremely talented management and board with turn around success and material skin in the game. 

A unique moat created by a collection of dominant companies in diversified business segments (Seating, Acoustic, Finishing, and Components) serving multiple sectors with repeat long term customers.

 

Insider Activity Details:
CEO(Kobylinski Brian)purchased 30,000 shares on 03/2017 and Interim CEO J Quinn added 100,700 shares on 09/2016 to his existing 19.20% ownership. These two recent purchases in combination totaled 130,700 shares for $261,119 at an average price of $1.99. In addition, 10% Owner(Wynnefield Partners Small Cap Value)purchased 1,026,334 shares for $2,540,913 at an average price of $2.45 per share during 2016.See table below
  



























 Board member and former Interim CEO Jeffry N. Quinn owns 4,382,809 shares, 19.20% shares outstanding per the 4/13/16 proxy. Quinn is Founder,Chairman and CEO of The Quinn Group and Quinpario Partners. Additionally, Quinn was named interim CEO of Jason on 11/9/15 and continues to serve as chairman of the board. Before Jason Industries,Jeffry Quinn was the former CEO of Solutia a global specialty chemicals and performance materials company. He led Solutia through Chapter 11 reorganization. Then after 8 years transformed this bankrupt small local player into a global leading specialty company. Solutia was sold in 2012 to Eastman Chemical Company (NYSE: EMN) for $4.8 billion.

 After the sale of Solutia, Quinn founded Quinpario Partners a privately owned investment and operating firm. Quinpario Partners formed Quinpario Acquisition Corp that completed its first business combination in 2014 when it acquired Jason Industries. Jason directors and executive officers as a group own 23.10% of Jason. Note again, that on the insider table above Quinn(interim CEO) purchased an additional 100,700 shares on 09/2016. 



Current Valuation per Yahoo


































Risk is the large debt and potential negative economic trends.

Long: JASN

1 comment:

Sports Bloggers said...

Seems like this business is under-capitalized from an equity standpoint. I would be interested in creating a stub in order to get exposure to the segment with the highest FCF yield within JASN.