LowIQinvestor Posted December 22, 2015 Share Posted December 22, 2015 I'm looking to put together a basket of cash rich net/nets. Anyone have some? I'm taking a fresh look at SXCL: $147M Market Cap $140M in net cash Any others on people's radars? Thanks Link to comment Share on other sites More sharing options...
NewbieD Posted December 22, 2015 Share Posted December 22, 2015 Here's the best one from my universe: Latvian Forest 64% of NCAV Market cap $13m Some political risk due to closeness to Russia, but underpriced IMO. Personally know one of the owners and he's a reliable guy. http://www.latvianforest.lv/ Link to comment Share on other sites More sharing options...
writser Posted December 22, 2015 Share Posted December 22, 2015 Since when is forest near the Russian border considered a current asset? :o Link to comment Share on other sites More sharing options...
BG2008 Posted December 22, 2015 Share Posted December 22, 2015 GEOS - $205mm in current assets, $40mm cash, $32mm in AR, $124mm in inventory, versus $17mm in Total liabilities. They own their own real estate and a rental fleet of Seismic equipment. Total book equity of $289mm versus market cap of $155mm. Actually has a very good business. Owns large market share in the wireless seismic business. Burning cash right now. Around $5-10mm a quarter. Company is well run, they continue their R&D during downturns and come out and tend to do well. Houston Wire and Cable - Easy to understand distribution business. $133mm in current assets versus $63mm in total liabilities. 1/3 of biz in oil and gas. Versus $87mm in market cap. Not a total net net. But business should be cashflow breakeven. Distribution business, when times are bad, they draw down their inventory and generate a lot of cash. Okay business in the long run. Should be worth 2x its current price. Friedman Industries - $49mm current assets, $3.57mm in total liabilities. Market Cap of $37mm. Related to Oil and Gas. Cashflow break even for now. Distribution business. I own a basket of these. Buy them and own them in 1-2% positions each and just ignore them for a while. Link to comment Share on other sites More sharing options...
KJP Posted December 22, 2015 Share Posted December 22, 2015 TNR Technical (TNRK) Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 22, 2015 Share Posted December 22, 2015 How about PCO, somewhat below net cash in the bank and cash flow positive. Link to comment Share on other sites More sharing options...
matjone Posted December 22, 2015 Share Posted December 22, 2015 If you don't care about quality it seems like you can always find these. I have stocks that I'm embarrassed to mention. Jadason in singapore is one example. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 23, 2015 Author Share Posted December 23, 2015 How about PCO, somewhat below net cash in the bank and cash flow positive. I've looked at PCO and can't figure out what their plan is? The Cash and NOLs are attractive but put in the wrong hands they can quickly be destroyed. I guess they were looking to be a patent troll...but that hasn't worked out. What's plan B? SXCL-Steel Excel looks like they had a plan to roll-up some oil and gas equipment cos but the timing was nothing short of horrendous. But at least there are some operating businesses to evaluate in addition to having lots of cash/marketable securities ( and NOLs). Thanks for the responses...keep em coming. Link to comment Share on other sites More sharing options...
feynmanresearch Posted December 23, 2015 Share Posted December 23, 2015 http://seekingalpha.com/article/3625816-the-outlook-for-houston-wire-and-cable-company-is-much-brighter-than-implied-by-the-recent-stock-decline Link to comment Share on other sites More sharing options...
BG2008 Posted December 24, 2015 Share Posted December 24, 2015 If you don't care about quality it seems like you can always find these. I have stocks that I'm embarrassed to mention. Jadason in singapore is one example. I think that GEOS is actually one of the better companies out there. It's just REALLY cyclical and levered to oil price. It's the kind of stock that you buy when the sentiment is so poor that most people would feel embarrassed to own them in their portfolio. The company has four segments. They own the leading position in the land based seismic equipment and basically the entire market share of the permanent reservoir monitoring systems. Their marine nodal system may generate revenue in this dire market. Q1/Q2 maybe a catalyst as there's a $17mm non-binding contract that may start. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 24, 2015 Author Share Posted December 24, 2015 GEOS - $205mm in current assets, $40mm cash, $32mm in AR, $124mm in inventory, versus $17mm in Total liabilities. They own their own real estate and a rental fleet of Seismic equipment. Total book equity of $289mm versus market cap of $155mm. Actually has a very good business. Owns large market share in the wireless seismic business. Burning cash right now. Around $5-10mm a quarter. Company is well run, they continue their R&D during downturns and come out and tend to do well. "Burning cash right now. Around $5-10mm a quarter" ---That is giving me pause I would encourage you to look into SXCL- http://steelexcel.com/ Safety due to the balance sheet Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 24, 2015 Share Posted December 24, 2015 I wouldn't expect too much from net-nets. Anything that is a net-net is by definition dysfunctional. In other words, I wouldn't expect positive cash flow, good plans, or even sound management. I'd expect very little, it'd be 100% optional value, a sort of I might lose 20 cents and maybe make $5 in the aggregate owning a basket of them. Link to comment Share on other sites More sharing options...
DavidVY Posted December 24, 2015 Share Posted December 24, 2015 NWLI is at around 60 of book. Float is tiny (difficult to accumulate). Insider ownership large so no real catalysts but you are buying a conservatively run insurance company at 55-60c/$. Link to comment Share on other sites More sharing options...
Jonas Posted December 26, 2015 Share Posted December 26, 2015 Here are a few I own: QCCO, NCON, MSN, DSWL, TAIT, WEBC, RELL, UPGI, OIIM, WILC, SPRS, EXAC, VIDE, BSHI, ERMS, AEY Link to comment Share on other sites More sharing options...
WeiChiLoh Posted December 26, 2015 Share Posted December 26, 2015 Hupsteel. Trades at 60% of NCAV. Doesnt burn cash. Is in fact liquidating so that NCAV is turning to cash. Hidden real estate value that will materialize over the new few quarters. High dividend yield. Link to comment Share on other sites More sharing options...
Ulrich Posted December 26, 2015 Share Posted December 26, 2015 NWLI is at around 60 of book. Float is tiny (difficult to accumulate). Insider ownership large so no real catalysts but you are buying a conservatively run insurance company at 55-60c/$. I own National Western , too. With the same logic you can maybe look at American NAtional Insurance ( conservative Insurance company company with the same owners "the Moodys" ). But National Western Life seems to build book value better. National Western life is not a bad business niche (high networth people in countries with monetary unsecurity). The Moodys grew this business for a long time (i think book value is in an uptick for 50 years). What i don't like ist that they became a little bit slow to deffer their aquistion costs . But that could fasten with better interest rates. --- As a german i m interested in an company named Hornbach Holding. Hornbach is an Do-It-Yourself retail chain under family control. They are growing for years and own gread commercial real estate in bigger cities (mostly in Germany, but in Austria, Switzerland... as well). They are profitable and are valued below their book value (and this book value is undervalued a lot, because the company is in business for a long time and looks like an real estate company selling wood and tools). For someone who is interested in good managed and growing european company with strong real estate assets.. look at Hornbach. Link to comment Share on other sites More sharing options...
frommi Posted December 26, 2015 Share Posted December 26, 2015 NWLI is at around 60 of book. Float is tiny (difficult to accumulate). Insider ownership large so no real catalysts but you are buying a conservatively run insurance company at 55-60c/$. Why do you think a company with an RoE of ~6% should be valued at bookvalue? Can someone else earn more with the same assets or what should the catalyst be for higher earnings? I would say Hornbach is in the same league, RoE of ~8% and p/b of 0.8 looks like fair value at the moment. At least as long as nobody is going to sell all the real estate assets, but the opportunity cost for holding until it happens can be huge. Link to comment Share on other sites More sharing options...
Ulrich Posted December 26, 2015 Share Posted December 26, 2015 @frommi: i don t think "nwli" or "hornbach" will double in 2016 :) I think these are good businesses under conservative family control with an track record (not warren buffett like, but who knows the next berkshire or m&t bank??? ). But the businesses are trading at a fair price and business models i understand. -- Another business that is cheap by assets is Sega Sammy from japan (video games, gambling machines, golf courses, casinos etc.). But i think the business ist much more difficult to value. Of course it could be an big winner. The next sonic game could be a pokemon or Grand Theft Auto blockbuster. But too hard to say for me. I like understandable businesses (for me, i m not the smartest person around) with good asset base i can buy at an fair price. Over time it worked for me :) I found a few big winners in the past; but these findings are rare today. Link to comment Share on other sites More sharing options...
kab60 Posted December 26, 2015 Share Posted December 26, 2015 Here are a few I own: QCCO, NCON, MSN, DSWL, TAIT, WEBC, RELL, UPGI, OIIM, WILC, SPRS, EXAC, VIDE, BSHI, ERMS, AEY Glad to have you on board, Jonas. I love reading your blog. Merry Christmas Link to comment Share on other sites More sharing options...
frommi Posted December 26, 2015 Share Posted December 26, 2015 I like understandable businesses (for me, i m not the smartest person around) with good asset base i can buy at an fair price. Over time it worked for me :) I found a few big winners in the past; but these findings are rare today. I understand that, but when i can get Berkshire with 10-15% forward returns, why invest in something that gives you lower returns with higher risks? Link to comment Share on other sites More sharing options...
Ulrich Posted December 26, 2015 Share Posted December 26, 2015 I don t say that i would not buy Berkshire at these prices. But for me there is a) i am German and so i like part of my assets in German companies (currency factors etc. ok over the long term that will not be the big factor). On the other hand it may be that buffett and the leaders of the berkshire companies are all clever and noble business men. But i think that Hank Greenberg was also a clever business man (maybe a bit to much into making the numbers) and i m sure a lot of people thought of AIG as an very risk free compounder. But in such an big conglomerate someone could do something stupid and maybe buffett is is ill or looses control an other way (ok , unlikely :) but possible). I think big business can easily become an political target. Buffett is a star in the american media. But maybe the media backfires and shows buffett as greedy old man and politics think that it would be an good move to crush his business. Maybe i think too German or European, but i know a lot of situations were business were crashed by political public stunts. For an example the german energy utilities. A lot of wealthy people had stock of energy companies here. Over night Angela Merkel thought that nuclear power became to unpopular and destroyed business models . I know that American is more business friendly, but i see that parts of the American politic elite wants to make the USA more France-like. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 28, 2015 Author Share Posted December 28, 2015 How do you guys think about the value of NOLs? SXCL has a good amount of them but I have generally excluded them from my valuation. Any thoughts? Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 28, 2015 Share Posted December 28, 2015 Making money is much harder than losing money. I consider NOL's virtually worthless in most cases and if they begin to be valuable, they will be a minor part of the value in relation to the 'new' profits that created them. I also think of them differently between those NOLs where the people who lost the money are still in power vs those NOLs (like a new shell) where new management has come on board. Link to comment Share on other sites More sharing options...
Jonas Posted December 28, 2015 Share Posted December 28, 2015 Here are a few I own: QCCO, NCON, MSN, DSWL, TAIT, WEBC, RELL, UPGI, OIIM, WILC, SPRS, EXAC, VIDE, BSHI, ERMS, AEY Glad to have you on board, Jonas. I love reading your blog. Merry Christmas Thank you! I'm glad you like it! Merry Christmas! :) Link to comment Share on other sites More sharing options...
Travis Wiedower Posted December 28, 2015 Share Posted December 28, 2015 Jonas, what's your blog? Always looking for more good ones to follow. Link to comment Share on other sites More sharing options...
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