Sticking With Velcro

Lots of people know what Velcro is--that wonderful fastener material made of nylon or polyester used mainly for apparel, home furnishings, sports equipment, and aircraft furniture. Late-night talk-show host David Letterman made Velcro even more famous when he attached himself high up on a wall in one of his shows, using only Velcro to hold himself up.

But one of the best-kept secrets on the Street is Velcro Industries, a Netherlands Antilles company that owns 65% of Velcro Group, the U. S. company that makes and markets Velcro products. Its stock is trading on NASDAQ at 31 a share, up from 23 in January, 1992. Some pros believe there's more upswing to come and have been buying in.

The reason: They figure Velcro is worth 50, and they expect the stock to get there through a buyout. Whispers are that Velcro Chairman Sir Humphrey Cripps, who is in his 70s and resides in the Channel Islands, is thinking of selling his controlling shares. Cripps is said to have received informal inquiries from two U. S. companies.

Two years ago, a group led by Sir Humphrey attempted to acquire the company, says Rick Teller, senior vice-president at Josephthal Lyon & Ross, a securities firm. When some shareholders sued to block it on grounds that the offered price was too low, the group backed off. Investors are apt to welcome a better deal.

Teller notes that a recent restructuring has helped Velcro weather the recession. It earned $3.27 a share on sales of $115 million in the year that ended Sept. 30, 1992. Earnings were $2.36 in 1991. Teller sees earnings growing to $3.60 a share in 1993 on revenues of $125 million.

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