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Hi all,

 

for those interested, I just ran a screen on companies with a MCAP at or below Cash, with following properties:

 

[*]MCAP < EV

[*]MCAP < Cash and other

[*]Non Asian companies to avoid Chinese accounting """standards"""

 

Two that popped out when quickly glancing over the results:

 

Camellia PLC - https://www.google.com/finance?q=LON%3ACAM&ei=1gLLUajFKqaqlwP-ugE

 

http://i42.tinypic.com/90nc4g.jpg

 

 

Catlin Group - https://www.google.com/finance?q=LON%3ACGL&ei=0v_KUaCeKofIlgOX8AE

 

http://i40.tinypic.com/kdsqo2.jpg

 

 

Anyone familiar with these names?

 

And, for your comfort, in attachment the whole list:

 

Cash_Companies.xlsx

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Regarding Camelia: very quick glance shows that they have a lot of cash but also a current liability of "amounts due to customers of banking subsidiary" for roughly the same amount. Haven't digged much further but I'm not sure that the cash on the balance sheet is actually "excess cash".

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Upon a cursory review, it looks like most of those are financial services businesses, so looking at balance sheet cash doesn't really tell you much about whether the company is undervalued on a net-net basis.

 

Perhaps the lesson is that there aren't many good opportunities on the long side out there right now!

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i also own conduril and believe that the risk/reward is very favorable, surprised that there isn't more interest in conduril on this board from investors with a modest size portfolio.....

 

regards

rijk

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Isn't most of Condruil's work in Angola and Mozambique?  Working with some clients who have EM customers, I have seen some work done that was never paid for because they did not receive advance payments.  Given that has does anyone know if these countries pay in advance or if Condruil does the work before they get paid?  TIA.

 

Packer

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Packer16

Regarding to Angola I know that its a seriously bad investment place for foreigners but that's my personal experience.

 

What was the nature of your work there?  I believe Conduril is building government projects, and as far as I can tell they have been paid for their ongoing work. 

 

They operate in the former Portuguese colonial sphere of influence in Africa, although I believe they've started to branch out.  They also have some projects coming on line in Spain.

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Isn't most of Condruil's work in Angola and Mozambique?  Working with some clients who have EM customers, I have seen some work done that was never paid for because they did not receive advance payments.  Given that has does anyone know if these countries pay in advance or if Condruil does the work before they get paid?  TIA.

 

Packer

They get paid after the work is done (see note 11.4 in annual report), and I think you correctly identify the biggest risk that Conduril has. But they do their work for the government and with a BB- rating Angola isn't too bad. So far they haven't had troubles collecting the reveivables. They actually generated ~22E/share in FCF this year vs a 33E share price. FCF is very erratic though since they are active in big multi-year projects, and it was around zero the previous years.

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agree that the risk is in receivables, i had a hard time believing the figures initially, however, if you go back a few years and follow receivables, there haven't been significant losses or additions to doubtful receivables, it looks as if the bulk of receivables is being converted into cash over time, if you look a the details of some of the larger projects, it appears that they tend to work with blue chip type of project partners and most projects appear to be tied to infrastructure projects related to the chinese resource hunt in africa, i.e. serious long term projects based on long term strategic trends

 

of course, there is always a possibility for surprises, that's why i hold a modest position in a diversified portfolio......

 

regards

rijk

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Oddballstocks,

Well as a matter of fact I know about building roads there and buying land-rovers to officials and the Chinese not taking payments in cash as they are the big road construction builders there in Angola they get resources instead of cash as payment. To be sure you need big pockets for payments buy the government can take years. 

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