M & F Worldwide, via a wholly-owned subsidary, is in the licorice, licorice-root, and licorice flavoring business. It may sound fairly unexciting, but it is a niche market. Over 70% of their sales are to tobacco and tobacco-derivative manufacturers which may be a concern longer-term due to health concerns with tobacco. However, the overall business looks sound and the shares are tightly-held by insiders who account for almost 75% of the shares outstanding (institutions hold 37.55%). What is remarkable about MFW is the fairly low level of Current Liabilities it maintains on its balance sheet. Cash is at $5 per share, and cash flow from operations runs at over $23M in the last 12 months. Insiders have been exercising options and selling them but the net  of insider transactions over the last year is positive in favour of buys.

Technically, the stock has consolidated in a tight range between $12.50 and $14 for  almost all of 2004 and has only just started showing signs of breakout, upwards out of the range. Certainly The Graham Investor sees this as is a limited-time opportunity to obtain an undervalued stock potentially worth $17+ for under $14/share, regardless of concerns about future revenues which are likely to be somewhat overblown.