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Central Steel & Wire Company (OTCPK:CSTW) recently released its 102nd annual report for the year ended December 31, 2010. Founded in 1909, the company is in the business of distributing processed and unprocessed ferrous and nonferrous metals. The company distributes its products from warehouses located in Chicago, Cincinnati, Detroit, Greensboro and Milwaukee.

Net sales for 2010 increased 36% to $708.7 million compared to 2009. Breaking out the 36% increase in revenue, pricing accounted for 20% of the while the other 16% was due to an increase in tons shipped. The company saw a major recovery in carbon long products which saw sales increase 51%. Net earnings were $4.6 million in 2010 compared to a loss of $2.3 million in 2009. Also during 2010 the company paid a dividend of $11.50 per share which is a current yield of 1.7%. It should be noted that the company's dividend varies year to year based on overall performance. In 2009, which was a difficult year, the company paid a dividend of $10 per share. In 2008 when the company's earnings were seven times higher than in 2010, the company paid a dividend of $30 per share.

The company saw modest improvements across most of its markets in 2010 and expects to see continued improvement in 2011. Below is an excerpt from the Chairman's letter regarding the state of the company.

Despite persistent high unemployment and potential fallout from the sovereign debt crisis, all indications are that business should continue to modestly improve during 2011. Price volatility, especially near the end of 2010 and beginning of 2011, continues to cause competitive pressure on margins. Prices are expected to stay at elevated levels for the near term, assuming mill production capacity remains in alignment with demand and input costs continue to rise.

Our plants and equipment are in excellent condition and working capital, including inventories, is managed in a manner to ensure sufficient liquidity for operating needs and to effectively respond to changing market conditions. We continue to be committed to capturing greater market share and enhancing the return on our assets through vigilant cost control, margin enhancement and greater efficiencies.

The company's balance sheet remains very strong with $63 million in cash and no long-term debt. In fact the company's cash covered its total liabilities with $8.5 million to spare at the end of 2010. The company finished the year with stockholders equity of $667.93 per share.

With a recent closing price of $660 per share, potentially undervalued assets and increasing earnings, the stock would seem to be a compelling value.

Source: Central Steel & Wire Company: Potentially Undervalued Assets, Increasing Earnings