Is Midas Stuck?

Shares of well-known but small automotive repair player Midas (MDS) have been on a tear since bottoming in early August. They are up more than 80% since then, and recently hit a 52-week high. Truthfully, though, it's been painful at times owning Midas, a company that I've compared to a character in one of the many great Seinfeld episodes. The problem, which is not uncommon in value land, has been that what looks great on paper does not always translate into operating performance, or recognition by the market. This company has been the epitome of that issue. Some might even call it a "value trap."

What drew me to the name a couple of years back was its combination of assets and possibilities. On the asset side, the company owns more than 200 properties, which is fairly compelling given the company's $243 million enterprise value. On the possibility side, in the midst of a recession, when few were buying new cars, it seemed plausible that the auto repair business would flourish. Consumers may not have had the money to buy new, but at some point they would have to repair their current autos. With cars averaging about 10 years of age at the time, it made sense to believe that the repair shops would be busy....254 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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