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trying to improve

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    Holobeam (HOOB) Update

    in General Discussion

    Posted

    I received the annual for Holobeam today and thought I would share some initial thoughts.

    Holobeam is a Delaware corporation that owns two pieces of commercial real estate in Paramus, NJ.

    62,000 square feet at 50 A & S Drive, triple net lease, Floor and Decor Corporation is the tenant

    30,000 square feet at 30 A & S Drive, triple net lease, Jo-Ann Stores Corporation is the tenant

    Both tenants requested and were granted three month rent holidays. As a result HOOB lost $475,000 in non-recoverable rent.

    Melvin Cook is the President, owns 9.8% of the company, and paid himself $450,000

    Beverly Cook is the Vice President, owns 9.8% of the company and was paid $350,000

    Cynthia R. Cook, trustee of The Cook 2003 Insurance Trust is listed as 66.3% owner.

    These three and their account make up the Board of Directors.

    All directors (4) have a combined salary of $850,000 as employees (not as directors). Since Melvin and Beverly make $750,000 then Cynthia Cook likely makes $100K.

    If correct the Cook clan of 3 make $850,000 for running a company consisting of 2 commercial buildings with triple net leases.

    260,000 shares outstanding and 2019 income $1.80 & 2018 $1.83. Obviously 2020 will not be pretty and the Company notes Covid and retail/internet risks in the notes.

    The last trade I see was at $38 for a market cap of $10mm and an enterprise value of $8.5mm if you back out $1mm of "trading investments" and leave $500,000 of cash in the company.

    Qualified 401(K) plan - the company contributed $81,000 in 2019. Not sure if this went to the Cook's and not sure if there are any other employees.

    The risk/reward is unattractive to me - The Cooks own 86% of the stock. They pay themselves either $750k or $850k a year to run 2 building on triple net leases. The two tenants had 3 months of rent forgiven. Covid and the internet could continue to adversely affect the tenants.

    not so sharp

     

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    Joined: Wed May 25, 2016 2:21 pm

     

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