Just a question, do you consider Canada an emerging economy? Hah.
if you tell us the name of the stock, it will likely help you if you already hold the position 
haha.
If it’s an EM country stock - the name of the game changes. I’ve seen net-nets. I purchased two in November of last year.
Okay, ran a screen since this guy won’t post the name. The only names that come close are: BDI-BioDiesel Intl, Netop Solutions, and I personally think it’s this one–LONG (it’s an ADR) I think it’s LONG b/c (this is based off annual numbers from Factset), price is around $12, cash/share is around $13, no debt, mkt value of 285m, doesn’t trade well, but also he said he bought it for his pa, which leads me to think he’s buying an adr rather than something on another exchange. Although it’s not making money…tricky
throw in SSRX on that list as well
Contrary to mwvt9 - A company we covered was trading below cash value (negative EV/EBITDA with positive ebitda) earlier this year so it can definitely still happen. In this case the stock was acquired As a general rule I would expect the companies to not “screen” well (transformational acquisition/divestiture, acct change, major debt refi, etc). A company isn’t just going to tell you that its profitable and trading below its cash value… because if it did unless there were a lot of reasons institutional investors couldn’t buy it (completely illiquid, questionable management/acct ethics, etc) it wouldnt stay that way for very long. Also profitability and cash flow aren’t necessarily one and the same… could be profitable and have some major working capital investments, or necessary replacement capex… or a bullet maturity (if we were talking about net cash). Maybe investors expect the company is going to have to furlough a plant or something and will have underutilized assets. Maybe its a biotech company that is burning cash in development stages… without giving the name of the company (and I doubt you’re moving the stock so it doesnt really matter if you let people know which stock) you can’t just say “is this stock gonna work”?
As for profitable companies trading at cash check out Gravity (GRVY). It has $1.89 cash per share and a book value of 2.31, with EPS of .21/sh. Reasons it’s trading so low: 1) South Korean small cap ADR - limited visibility 2) Not very liquid, about 124k avg volume 3) Was losing money hand over fist, brought in a turn around CEO recently who brought the company to profitability but it’s only been two quarters since the change. Here’s a link a presentation the company gave recently http://www.gravity.co.kr/eng/ir/ir_doc_read.asp?seq=77&page=1&sm=&sk=
ValueAddict Wrote: ------------------------------------------------------- > If it’s an EM country stock - the name of the game > changes. I’ve seen net-nets. I purchased two in > November of last year. I’ve been scouring for net-nets since the fall as well, a few good resources: net-net screen: http://www.grahaminvestor.com/screens/grahams_result net-net/liquidation/activist/catalyst blog: http://greenbackd.com A note about many companies on that list, all that glitters isn’t always gold. Lots of companies have huge obsolete inventories, or filings are out of date. Lots of due diligence required before making any purchases. Most of the issues are smaller so liquidity can be an issue.
pgh.ndt Wrote: ------------------------------------------------------- > As for profitable companies trading at cash check > out Gravity (GRVY). It has $1.89 cash per share > and a book value of 2.31, with EPS of .21/sh. > > Reasons it’s trading so low: > 1) South Korean small cap ADR - limited > visibility > 2) Not very liquid, about 124k avg volume > 3) Was losing money hand over fist, brought in a > turn around CEO recently who brought the company > to profitability but it’s only been two quarters > since the change. > > Here’s a link a presentation the company gave > recently > http://www.gravity.co.kr/eng/ir/ir_doc_read.asp?se > q=77&page=1&sm=&sk= a saw this one but isn’t there only cash producing asset ragnorak and can’t that disappear in a year or so?
I wonder if a big thread on AF can count as a catalyst for a microcap. I agree that if the company is an EM company, then you may have a discount to reflect the fact that you may not be able to get your hands on the assets in a liquidation, books may not be reliable, currency may devalue suddenly, etc.
MattLikesAnalysis Wrote: ------------------------------------------------------- > pgh.ndt Wrote: > -------------------------------------------------- > ----- > > As for profitable companies trading at cash > check > > out Gravity (GRVY). It has $1.89 cash per > share > > and a book value of 2.31, with EPS of .21/sh. > > > > Reasons it’s trading so low: > > 1) South Korean small cap ADR - limited > > visibility > > 2) Not very liquid, about 124k avg volume > > 3) Was losing money hand over fist, brought in > a > > turn around CEO recently who brought the > company > > to profitability but it’s only been two > quarters > > since the change. > > > > Here’s a link a presentation the company gave > > recently > > > http://www.gravity.co.kr/eng/ir/ir_doc_read.asp?se > > > q=77&page=1&sm=&sk= > > > a saw this one but isn’t there only cash producing > asset ragnorak and can’t that disappear in a year > or so? Yeah, I’m in agreement with you. They have a few items in the pipeline which could hold potential, but you never know. There is a ragnorak 2 coming out at some point along with Ice Age online based on the movie. As to being an investment I don’t know how much upside is left on the basis of it being undervalued on a balance sheet basis, I think any upside from this point forward is going to be related to the new games and future earnings potential.