For the uninitiated, this is a company that is extremely secretive and refuses to release financials to shareholders without a signed NDA. When this happens it’s usually the case that management is either stealing outright from shareholders, or trying to hide an enormous amount of value.
The company owns a money losing factory in Tennessee, interest in a building in Cincinnati, and timberland in Michigan. They also own a sizable amount of marketable securities which dwarf any other asset on their balance sheet. At the end of 2016 they had $139m in marketable securities, compared to $5m in other assets.
In 2016, the company earned $1.6m, or $1.77 per share, up from $1.235m in 2015, or $1.35 per share. There are 1,999,512 shares issued and 911,534 shares outstanding. Comprehensive income, which includes gains from their marketable securities, is significantly higher at $18m in 2016 or $19.73 per share.
The majority of the company’s marketable securities primarily consist of PNC and USB stock.
In the early 2000s a shareholder requested, and received a breakdown of their portfolio of security holdings. A friend recently went through and updated those old holdings with their 2018 values to include splits and dividends. As you can see from below, just the security holdings below are significantly more valuable than the company. It's also worth considering why Vulcan isn't considered an investment company, and regulated as such considering the majority of their value is public stock investments. (hint, any SEC regulators reading this, and I know that some do, please take a look?).
| Utilities | Shares | Adj Shares | Total Dividends | Share Value |
| Vodafone Airtouch PLC (Symbol: VOD) | 20016 | 16,027 | $ 573,130 | $ 478,235 |
| Verizon (VZ) shares received in VOD spin 2/24/14 ratio .263 : 1 | 4,215 | $ 40,464 | $ 209,359 | |
| Verizon (VZ) | 32814 | 36,608 | $ 982,960 | $ 1,818,319 |
| IDARQ spin-off 11/20/06 | ||||
| FRCMQ spin-off 4/01/08 | ||||
| FTR spin-off 7/02/10 ratio .24 : 1 | 8,786 | $ 29,747 | $ 74,329 | |
| Bellsouth (now AT&T) (T) | 77904 | 103,222 | $ 2,090,000 | $ 3,612,770 |
| acquired 1/3/07--as of 12/29/06 dividends received, 1.325 shares of T | 77,904 | $ 239,170 | $ - | |
| Cincinnati Bell (CBB) | 214100 | 42,820 | $ - | $ 650,864 |
| Convergys (CVG) | 182000 | 182,000 | $ 329,420 | $ 4,317,040 |
| Duke Power (DUK) | 25000 | 14,313 | $ 571,310 | $ 1,119,596 |
| FPL Group (now NextEra Energy) (NEE) | 32375 | 64,750 | $ 2,130,000 | $ 10,500,508 |
| SBC Communications (now AT&T) (T) | 109982 | 109,982 | $ 2,620,000 | $ 3,849,370 |
| Qwest Comm. (now CenturyLink) (CTL) | 15231 | 2534 | $ 45,435 | |
| FairPoint Comm. (Verizon spin) (now Consolidated Comm.) (CNSL) | 468 | $ 5,157 | ||
| Frontier Comm. (Verizon spin) (FTR) | 8214 | $ 69,490 | ||
| Enbridge (Spectra Energy (Duke Power spin)) (ENB) | 12300 | $ 361,497 | ||
| Financial | ||||
| PNC Financial (PNC) | 659090 | 659,090 | $ 17,530,000 | $ 95,574,641 |
| U.S. Bancorp (USB) | 783441 | 783,441 | $ 10,810,000 | $ 39,501,095 |
| Other | ||||
| California Coastal Communities | 447 | 447 | $ - | |
| Prudential Financial (PRU) | 259 | 259 | $ 27,749 | |
| Principal Financial Group (PFG) | 6165 | 6165 | $ 376,373 | |
| MM Companies | 100 | 100 | $ - | |
| Piper Jaffray (U.S. Bancorp spin 12/31/2003) (PJC) | 7834 | 7834 | $ 647,480 | |
| Grand total | $ 37,946,201 | $ 163,239,308 | ||
| Per share | $41.63 | $179.08 |
What's even more interesting is how I obtained the company's financials last year. The sister of the Chairman sent them to me in an unmarked envelope. No NDA, no description, just raw financials.
Maybe there is some discord in the family and some of the siblings want something to happen? Who knows.
What stands out when you look over the financials (link here) is that this company needs to dump their Tennessee operations. The company loses money before dividends primarily due to their manufacturing subsidiary. A few years ago I spoke to a shareholder who noted that it's been a few decades since they made money on manufacturing. Just think of all the money incinerated from that factory, it's mind-numbing.
But beyond the ball and chain hanging around this company's ankles the rest of their assets are extremely valuable.
As a friend put it, (paraphrase) "A company like this is like buying gold in North Korea, it has value, but will you be able to get it out?" Now that North Korea is opening up it's possible to say that anything can happen. Maybe Vulcan is next!
Disclosure: Long a single share
