Dear Mr. Berko:

Dear N.T.:

M&F Worldwide Corp. (MFW-$24.53), formerly known as Mac-Andrews & Forbes, sells technology services and checks to banks from its Harland Clarke Corp. division. It’s also a leading designer and manufacturer of high-precision camera systems for the TV and movie industry. MFW is also the world’s largest producer of licorice extracts used by food processors, the pharmaceutical industry, cosmetic companies and almost all tobacco companies. Then, through its Scantron Corp. division, MFW provides data management solutions and testing, tracking and survey services to municipal, state and other government agencies.

This year, MFW expects to generate $1.8 billion in revenues from those businesses and net $6 per share. These earnings mean that MFW trades at an extremely low price-to-earnings ratio of 4, so the shares look interesting.

There are only 20 million shares, which trade about $6 below their $31 book value. This, too, makes MFW look attractive.

The company has a free cash flow of $240 million and $15 in green standing behind each of those 20 million shares. And this makes MFW look pretty good.

However, I can’t find an analyst north or south of the Mason-Dixon Line who follows MFW. That’s concerning and suggests there’s less to MFW than meets the income statement and balance sheet. Still, Andrew Bary, who writes for Barron’s, published a very positive article on the stock in mid-January.

The reason MFW is trading on the cheap is that few of the suits on the Street trust Ron Perelman, its colorful, high-energy, self-serving, in-your-face founder, who owns at least 43 percent of the stock. Perelman has an ego bigger than Texas and has been married four times.

He is actively engaged in many worthwhile charities and is often giving of his time and his money. However, some folks on the Street are not comfortable with the manner in which he comports his business activities (Revlon, Panavision and Sunbeam, to name a few) and question his probity. MFW seems to be his personal fiefdom run for his benefit and that of his bosom associates. There’s a running rumor that Perelman might purchase 10 million more shares, and the talking price is $35 per share. However, Perelman, who didn’t become a multibillionaire by writing personal checks for his toys, will certainly use MFW’s $240 billion-plus cash flow to effect the purchase. So there might be a potential $10 gain in the shares if Perelman takes MFW private.

Still, I’d not buy the stock. A buyout notwithstanding, there’s a remote possibility that MFW could trade in the mid-$30s. I’d suggest you hold your 200 shares, but don’t increase your risk and buy 200 more.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. ©2011 Creators.com