Microcap CPAC's Share Price Below Book Value (CPAK)

| About: CPAC Inc. (CPAK)

CPAC, Inc. (CPAK) operates two business segments: Fuller Brands and CPAC Imaging. Fuller Brands develops and markets cleaning and personal care products such as deodorizers, stain removers, brooms, and brushes. CPAC Imaging develops and markets chemicals and equipment for color photographic, health care, and graphic arts applications. Products from this segment include chemical mixers for health care imaging, illuminators for viewing medical x-rays, and sterilizers for dental practices.

CPAK is a microcap stock with a market cap of approximately $20 million. Although management has done a fine job of reducing shares outstanding over the long term, profitability for the past few years has been more elusive. Sales have also been declining for several years, so the company’s financial results aren’t what caught our attention.

What CPAK does offer is a share price that’s well below book value —- the price/book ratio is 0.57. With the stock so cheap on this basis, can it get any cheaper? Will management buy back stock or take the company private? Two successful funds we know hold shares of CPAK: Fidelity’s Low Priced Stock Fund owns 11.7% of shares outstanding and Dimensional Fund Advisors owns 6.4%.

CPAK 1-yr chart: