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Monday, October 20

Nano Cap, 37% Discount to NAV, 8.4% Dividend Yield


BDCA Venture (BDCV) is a closed-end investment company. They specialize in making pre IPO investments in emerging growth companies committed to and capable of a public listing.

Corporate Website 

The first thought, BDCV has an investment portfolio trading below fair market value. Further, take part in value accretion realized by participating before a private company goes public.

Source Corporate Website: “Private companies raise a final round of pre-IPO financing to strengthen their balance sheet and demonstrate continued investor commitment. And that’s where BDCA Venture fits in: BDCA Venture is an equity partner to private companies primed to become public. BDCA Venture typically invests in later stage, venture capital-backed private companies with at least $20 million in trailing 12 month revenue seeking to complete an IPO within 2 years.”

Many Micro cap stocks have been depressed. For this reason and others, BDCA price per share negatively impacted with a 52 week change of -33.43%. A strong capital return, dividend yield is 8.44%.

Why consider adding BDCV to a watch list?

BDCA Venture  is a nano cap trading at 45M, enterprise value of 36M led by a strong investment team. Investment team of 4 has the following investing credentials. CEO and founder held senior management positions in the Equity and Derivatives departments of Bear Stearns, Kidder Peabody, Nomura including a cum laude graduate of Harvard College.  The remaining 3 investment team members have experience at Goldman Sachs , all Ivy League graduates, merger/acquisitions attorney,  CFA holder.

Share buybacks and modification of its investment objectives announced 09/25/14 should help narrow the large 37% share price discount to its NAV. June 30, 2014 net asset value was 7.32 per share or $71.6 million. Cash of 9.8M made up 14% of the NAV, publically traded securities of 11.90M or 17%.

The investment objective modification is to direct cash from exited investments into debt investment opportunities. However, the investment team does not expect that the Company’s position in debt investments will constitute a meaningful portion of the portfolio prior to December 1, 2014. Also, the Company is not expected to make any share repurchases until early November after reporting quarterly results in late October.

Additional BDCV articles to include in your decision making process.

Zoosk And TrueCar IPOs Ready To Show How Undervalued Keating Capital Shares Are

A Good Case For Keating Capital

No Position at this time.

Monday, October 13

Political Uncertainty Creating Two Deep Value Opportunities




TransGlobe Energy Corporation (TGA)

TransGlobe Energy is an oil and gas exploration, development and production company. It operates in two segments, the Arab Republic of Egypt and the Republic of Yemen. Founded in 1968, it’s headquartered in Canada.

TransGlobe Energy was ranked #30 in Fortune Magazine’s 100 Fastest-Growing Companies of 2012.So what happened that transformed TGA into a deep value stock? The stock was $20.23 December 2010.

Financial results have been stellar with several years of proven capital allocation,high ROIC. The main issue comes down to fear of political turmoil in Egypt and the related issue with receivable from the state owned national oil company of Egypt (“EGPC”).They also had an operational issue with PCP pump failures that impacted production. The pumps have been fixed. Lastly, pressure on the price of oil, coupled with profound weakness in small capitalization stocks.

TGA now trades as a deeply undervalued company using any valuation metric, DCF, book value, NCAV, or earning yield.  

Mean reverting metrics;
3 year stock return is -16%, 52 week change -44.30%
Enterprise Value/EBITDA = 1.69, EV/EBIT = 2.19

Average annual ROIC from 2010 to MRQ is 16.86%, couple this with an EV 359,410,000/long term assets of 395,439,000 = .90: those assets based on historical returns should easily outperform the current market price for those long term assets.

Dividend yield trailing of 3.80% supported by strong financial position and free cash flow. Z score of 4.30 indicates a remote chance of bankruptcy.

Graham value number of $11.82 versus the current price of $5.08,
Historically and industry cheap valuation… EV/EBIT = 2.19, EV/Revenue = 1.14, P/TB = 1.05 =  NCAV = 3.22

NCAV = 3.22, Cash per share = 1.47, AR per share = 1.97, Current assets of 3.74 per share, Current liabilities of .51


Multiple catalysts exist for this financially sound high ROIC company.

No position at this time.

Valuation Measures
Market Cap: 380.65M , Enterprise Value:   359.41M
Trailing P/E (ttm): 5.71
Price/Sales (ttm):1.26 ,Price/Book (mrq):0.74
EV/Revenue (ttm):1.14 ,EV/EBITDA (ttm): 1.69
Profit Margin (ttm): 21.05% , Operating Margin (ttm): 48.15%
Return on Assets (ttm): 13.73% , Return on Equity (ttm): 13.10%
Revenue (ttm):  314.13M , Revenue Per Share (ttm):  4.22
Qtrly Revenue Growth (yoy):  -0.20%
Gross Profit (ttm):  249.89M , EBITDA (ttm):  213.18M

Total Cash (mrq):   110.06M , Total Cash Per Share (mrq):1.47
Total Debt (mrq):  88.81M , Total Debt/Equity (mrq): 16.58
Current Ratio (mrq): 9.29
Book Value Per Share (mrq): 7.15
CFFO (ttm): 167.94M . FCF(ttm): 58.42M

52-Week Change: -44.30%
52-Week High: 9.66 , 52-Week Low:  4.93

Shares Outstanding:    74.93M , Float:  71.68M
% Held by Insiders:    4.53% , % Held by Institutions: 40.00%
Trailing Annual Dividend Yield:   3.80


CTC Media, Inc (CTCM)
Another idea trading at a deep discount due to political uncertainty is Russia Media CTCM: CTC MEDIA INC.

Both CTCM and TGA moved higher today, TGA +3.35% and CTCM +3.31%. My work was based on Sunday night’s prices but the thesis is still intact.

Saturday, October 4

2011 to MRQ; Share Count Reduced, BV Increased, LTD Reduced, GP Per Share Increased, Underperformed Market



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Symbol Company Industry MC ($Mil) EV ($Mil) Price Change YTD LTD 2011 ($Mil) LTD MRQ ($Mil)
ASFI Asta Funding Inc Business Services $107.00 $108.88 -1.43 $71.60 $27.43
BGG Briggs & Stratton Corporation Diversified Industrials $883.16 $826.33 -15.92 $583.89 $474.09
ODC Oil-Dri Corp of America Specialty Chemicals $193.55 $172.32 -30.6 $51.62 $46.85
STNR Steiner Leisure Ltd Personal Services $558.79 $551.06 -23.85 $205.29 $161.49
TWIN Twin Disc Inc Diversified Industrials $310.59 $280.77 2.32 $88.08 $58.42




Symbol Share Outstanding MRQ Shares Outstanding 2011 Equity Per Share MRQ Equity Per Share 2011 GP Per Share TTM GP Per Share_2011
ASFI 12,984,882 14,626,973 13.72 11.69 9.14 5.93
BGG 46,366,000 49,677,000 14.64 12.67 7.57 6.88
ODC 4,965,250 5,083,000 15.43 13.42 12.71 9.84
STNR 14,454,000 15,013,000 27.1 21.18 12.46 10.56
TWIN 11,264,000 11,319,000 13.42 11.68 6.87 10.66




ASFI: “Asta Funding, Inc. through its subsidiaries is engaged in the business of acquiring, managing, servicing and recovering on portfolios of consumer receivables” Source Morningstar
Book value of 13.95 versus the current price of $8.35. Further a healthy Z score of 3.6 has continually improved from a 2009 value of -.46. Using the conservative valuation method, “Graham Number” ASFI trades at a discount to its intrinsic value. From the fiscal period ending 2011 the share count was reduced, book value increased,long term debt reduced, book value increased.  

Shares Outstanding = 12,976,863
Total Equity = 181,106,000
Intangibles(goodwill) = 2,770,000
Tangible Book Value 178,336,000
Tangible Book Value Per Share 13.74261253
Net Income from Continuing Operations 12,013,000
Net Income from Continuing Operations Per Share 0.925724499
Tangible Book Value per Share   *       Earnings Per Share 12.7218731

(Tangible Book Value per Share *Earnings Per Share) * 22.50 286.2421446
Square Root of ((Tangible Book Value per Share* Earnings Per Share) * 22.50) = 16.91869217





ASFI Graham Number of 16.91 versus current price of $8.35




Market Cap: 108.42M , Enterprise Value:  109.85M
Price/Sales:  2.73 ,Price/Book:  0.60
Enterprise Value/Revenue:  2.77
Revenue (ttm):  39.70M , Revenue Per Share:  3.06
Qtrly Revenue Growth (yoy):  -19.70%
EBITDA (ttm):  -6.81M ,
Total Cash (mrq):  26.02M ,Total Cash Per Share (mrq):   2.00
Total Debt (mrq):   27.43M ,Total Debt/Equity (mrq):   15.19
Current Ratio (mrq): 4.67 ,Book Value Per Share (mrq): 13.95
52-Week Change:   -0.83% , S&P500 52-Week Change: 18.69%
52-Week High:  8.77 , 52-Week Low: 7.94
Shares Outstanding: 12.98M ,Float:  8.49M
% Held by Insiders:  41.28% ,% Held by Institutions:   38.60%


5 Year Average Dividend Yield: 1.50% 

Ownership: ASFI is held by proven value institutions, Pinnacle Value, Chou Opportunity and others. Insider activity for 2014 was negative.

Share count reduced 12.64% from a 2011 fiscal year end balance of 14,626,973 shares outstanding to the MRQ 12,984,882.

Book value per share increased 17.34% from 2011 to MRQ.

Gross Profit per share increased 54.13% from 2011 to the MRQ.

Long term debt was reduced from a 2011 fiscal yearend balance of 71.60M to MRQ 27.43M or 160%.





BBG “Briggs & Stratton Corporation is the producer of air cooled gasoline engines for outdoor power equipment. The Company designs, manufactures, markets and services these products for original equipment manufacturers.” Source Morningstar


Market Cap: 806.66M , Enterprise Value:     855.62M
Price/Sales (ttm):  0.44 , Price/Book (mrq):  1.22
EV/Revenue (ttm):0.46 ,EV/EBITDA (ttm): 7.74
Revenue (ttm):  1.86B , Revenue Per Share (ttm):   40.10
Qtrly Revenue Growth (yoy):  4.10%
Gross Profit (ttm): 346.78M , EBITDA (ttm):  110.60M
Total Cash (mrq):  194.67M , Total Cash Per Share (mrq):  4.25
Total Debt (mrq):  226.21M , Total Debt/Equity (mrq):  33.64
Current Ratio (mrq):  2.87 , Book Value Per Share (mrq):  14.52
Operating Cash Flow (ttm): 127.08M , Levered Free Cash Flow (ttm): 47.49M
52-Week Change:  -9.69%  S&P500 52-Week Change: 16.83%
52-Week High (Mar 7, 2014):    23.02 ,52-Week Low (Oct 1, 2014):  17.14
Shares Outstanding:    45.81M ,Float:  43.89M
% Held by Insiders:    7.47% , % Held by Institutions:   86.50%
Short % of Float (as of Sep 15, 2014): 21.90%

Forward Annual Dividend Yield: 2.80% , Trailing Annual Dividend Yield:  2.70%

ODC “Oil-Dri Corporation of America develops, manufactures and markets sorbent products. Its sorbent products are principally produced from clay minerals, primarily consisting of montmorillonite and attapulgite.” Source Morningstar


Market Cap: 185.14M , Enterprise Value:  187.89M
Price/Sales (ttm):  0.71 , Price/Book (mrq):  1.73
EV/Revenue (ttm):   0.71 , EV/EBITDA (ttm): 7.38
Revenue (ttm):  264.16M , Revenue Per Share (ttm):  37.95
Qtrly Revenue Growth (yoy):  5.10%
Gross Profit (ttm):  66.50M , EBITDA (ttm):  25.46M
Net Income Avl to Common (ttm): 12.44M
Total Cash (mrq):  19.68M , Total Cash Per Share (mrq): 2.78
Total Debt (mrq):  22.40M , Total Debt/Equity (mrq):    20.74
Current Ratio (mrq):  2.95 , Book Value Per Share (mrq):  15.28
52-Week Change:   -22.01%
S52-Week High:   41.74 ,52-Week Low:  24.52
Shares Outstanding: 7.07M , Float:  4.48M
% Held by Insiders:  1.98% , % Held by Institutions:  76.20%
Short % of Float (as of Sep 15, 2014): 3.30%

Forward Annual Dividend Yield: 3.00% ,5 Year Average Dividend Yield: 3.40%

STNR “Steiner Leisure Ltd is engaged in the service of traditional and alternative massage, body and skin treatment options, fitness, acupuncture, medi-spa treatments and laser hair removal.” Source Morningstar



Market Cap: 535.52M , Enterprise Value:   583.39M
Price/Sales (ttm):  0.63 , Price/Book (mrq):   1.38
EV/Revenue (ttm):   0.68 ,EV/EBITDA (ttm): 8.12
Revenue (ttm): 861.79M , Revenue Per Share (ttm):   58.98
Qtrly Revenue Growth (yoy):   0.80% , Gross Profit (ttm): 186.22M
EBITDA (ttm):  71.85M ,
Total Cash (mrq):   45.21M ,Total Cash Per Share (mrq):   3.13
Total Debt (mrq):  93.08M ,Total Debt/Equity (mrq):   23.69
Current Ratio (mrq):   0.97 ,Book Value Per Share (mrq):  27.18
52-Week Change:    -34.98%
52-Week High:  61.74 ,52-Week Low : 36.90
Shares Outstanding:    14.45M ,Float:  13.30M
% Held by Insiders:    7.79%, % Held by Institutions:   92.80%

Short % of Float : 3.60%



TWIN “Twin Disc Inc designs, manufactures and sells marine and heavy duty off-highway power transmission equipment. Its products include marine transmissions, surface drives, propellers, boat management systems, power-shift transmissions and controls systems.” Source Morningstar

Market Cap: 276.75M ,.Enterprise Value :   285.98M
Price/Sales (ttm):  1.10 ,Price/Book (mrq):  1.91
EV /Revenue (ttm): 1.08 ,EV/EBITDA (ttm): 13.00
Revenue (ttm):  263.91M ,Revenue Per Share (ttm): 23.44
Qtrly Revenue Growth (yoy): -3.10% ,Gross Profit (ttm):77.25M
EBITDA (ttm):  22.00M
Total Cash (mrq):  24.76M ,Total Cash Per Share (mrq): 2.19
Total Debt (mrq):  18.40M ,Total Debt/Equity (mrq):  12.08
Current Ratio (mrq):   3.16
Book Value Per Share (mrq): 13.46
Operating Cash Flow (ttm):25.75M ,Levered Free Cash Flow (ttm):17.07M
52-Week Change:   -0.97% ,S&P500 52-Week Change: 16.83%
52-Week High (Sep 4, 2014):  34.38 ,52-Week Low (Jan 28, 2014):    18.67
Shares Outstanding:    11.28M , Float:  8.79M
% Held by Insiders:    25.50% , % Held by Institutions:  53.30%
Short % of Float (as of Sep 15, 2014): 5.40%

Forward Annual Dividend Yield: 1.40%

 

Monday, September 29

< 20 Million in Float Market Value + Convincing 2014 Insider Purchases



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click for Yahoo Quotes on stocks


Symbol Name Industry Exchange Country Enterprise Value  Market Cap Price Price Change YTD Price Change (3 years) Price Change (52 weeks)
ABIO ARCA biopharma Inc Biotechnology NAS USA 7,730,000 26,470,000 $1.23 -29.76 -44.97 -15.71
AMS American Shared Hospital Services Specialized Health Service AMEX USA 35,630,000 11,780,000 $2.23 -18.77 -5.78 -19.88
AUMN Golden Minerals Co Industrial Metals & Minera AMEX USA 17,900,000 25,760,000 $0.67 39.83 -56.98 -32.4
CACH Cache Inc Apparel Stores NAS USA 20,150,000 19,260,000 $0.90 -82.87 -40.04 -84.65
CLRB Cellectar Biosciences Inc N/A NAS USA 9,680,000 6,860,000 $2.35 -67.84 -53.05 -62.81
HGBL Heritage Global Inc N/A OTCPK Canada 15,730,000 12,690,000 $0.44 -38.73 -43.01 -42
INVT Inventergy Global Inc Telecom Services - Domesti NAS USA 49,100,000 41,850,000 $1.60 -54.73 -7.72 10.01
QBAK Qualstar Corp Diversified Electronics NAS USA 8,020,000 15,560,000 $1.26 15.04 -12.64 -7.8
RAND Rand Capital Corp Asset Management NAS USA 22,590,000 19,680,000 $3.07 -0.33 0.89 1.67
SDOI Special Diversified Opportunities Inc N/A OTCPK USA 535,270 26,070,000 $1.18 6.9 -8.15 26.4
TSSI TSS Inc N/A OTCPK USA 6,800,000 3,450,000 $0.23 -47.95 -47.14 -69.05
USEL usell.com Inc N/A OTCPK USA 15,890,000 18,040,000 $2.68 -5.67 -33.27 21.33




Symbol Cash % of Price Price 9/29/14 Shares Outstanding Curent SO_2012 F Score Financial Strength Short % of Float Quick Ratio Z Score Quarterly Revenue Growth Pct Floa t / Shrs Outstanding Founded Date Full Time Employees Insider  Ownership
ABIO 0.73 1.24 21.01 2.22 3 0.00 16.71 16.17 6.73 0.00 0.71 0 14 4
AMS 0.84 2.23 4.72 4.61 3 6.13 0.12 0.87 0.5 -26.30 0.62 1980 9 29
AUMN 0.41 0.67 42.92 37.52 3 5.33 0.00 2.5 -14.2 0.00 0.64 1996 65 0
CACH 0.04 0.89 24.08 15.86 3 8.63 16.64 0.2 1.91 -10.00 0.45 1975 871 10
CLRB 0.24 2.2494 2.87 2.8 2 0.00 0.00 0.49 -19.02 0.00 0.46 2002 n/a 0
HGBL 0.18 0.435 28.17 28.29 5 3.67 0.00 0.36 -12.69 45.50 0.10 1983 34 0
INVT 0.01 1.65 1.45 1.44 0 5.27 14.74 1.01 -1.42 0.00 0.01 0 10 42
QBAK 0.49 1.21 12.25 12.25 4 8.27 0.02 2.39 1.07 -13.20 0.30 1984 57 23
RAND 0.21 3.1 6.41 6.51 4 6.50 0.00 0 1.56 -8.50 0.31 1969 4 0
SDOI 0.98 1.18 21.03 20.53 4 0.00 0.00 35.4 20.48 0.00 0.54 1987 2 0
TSSI 0.39 0.229 14.48 14.38 2 3.83 0.57 0.83 -5.23 -9.30 0.37 2004 104 40
USEL 0.06 2.6 5.83 0.3 4 2.00 0.00 0.83 -25.23 39.60 0.33 0 19 0




A few of the items I may review for stocks with insider buying. The share count change for several years, price  action preferring mean reverting opportunities, ownership of  shares, financial position / financial strength, capital structure, z scores 2.44 or greater indicates a remote chance of bankruptcy, F score (1 to 10), insider ownership, and many other metrics.


QBAK owned by nano cap value guru Lloyd Miller was up 35% on 10/02/14.The list above contains stocks that are not deep value like SODI. SODI trades at its cash per share with NOL. 

Saturday, September 27

Deep Value Nano Cap + Reallocating Cash + Recent Convincing Insider Buys




CadusCorp. (KDUS): Long time value trap has changed over the prior 2 quarters. The company will now take its box of cash to purchase residential properties for purposes of investment, renovation or construction and resale. KDUS has $20m-$30m of NOLs.


Recent insider buys

Aug 19, 2014
10,000
Direct
Purchase at $1.51 - $1.55 per share.
15,000
Jun 6, 2014
ICAHN CARL CBeneficial Owner (10% or more)
12,563,840
Indirect
Option Exercise at $1.53 per share.
19,222,675


Current price = $1.57
Market Cap: 41.27M  Enterprise Value: 20.64M
Price/Book (mrq):1.00
Total Cash (mrq): 20.63M , Total Cash Per Share (mrq):0.79 
No Debt,  Book Value Per Share (mrq):1.61
52-Week Change:  5.37%
52-Week High (Jul 2014):$1.89  52-Week Low(Apr,2014):$1.41
Shares Outstanding: 26.29M ,Float: 6.78M

% Held by Insiders:    63.30% ,% Held by Institutions:    7.60%


Taken from the most recent 10Q:

“In connection with the Company’s program to purchase residential properties for purposes of investment, renovation or construction and resale, as of August 14, 2014, the Company has purchased for an aggregate of approximately $23.3 million, and continues to own through an indirect wholly-owned subsidiary, ten residential properties in Miami-Dade County, Florida. Of these, eight properties had existing homes on them and two properties were vacant lots. In addition, as of August 14, 2014, the Company, through wholly-owned subsidiaries, has entered into a binding contract for the purchase of a vacant lot in Miami-Dade County, Florida for $3.2 million and has entered into a contract for the purchase of a vacant lot in East Hampton, New York for $3.1 million. The contract for the East Hampton, New York property may be terminated by the Company at any time on or prior to August 18, 2014. The closings under both contracts are currently anticipated to occur in late August 2014. The Company does not currently intend to purchase additional properties following these closings until it has begun to sell renovated or newly constructed homes from its existing inventory of properties. To date, with the exception of the contract to purchase the East Hampton property, the Company has concentrated its real estate activities in Miami-Dade County, Florida.

With respect to the Company’s existing inventory of properties, three existing houses are under renovation and five others are being demolished. The Company is the process of engaging architectural firms with respect to the properties undergoing demolition as well as for its vacant lots.

In addition to its real estate activities, Cadus will continue to consider acquisitions or investments in various industries.

The Company conducted a rights offering for the issuance of up to 13,144,040 shares of its common stock pursuant to its S-1 filing with the Securities and Exchange Commission that became effective April 28, 2014. In connection with the rights offering, the Company distributed to the holders of its common stock non-transferable subscription rights to purchase up to 13,144,040 shares of its common stock at $1.53 per share. Effective June 6, 2014, all 13,144,040 shares available in the offering were subscribed and the company received gross proceeds of $20,110,381, less offering costs of approximately $263,500.

At June 30, 2014, the Company had an accumulated deficit of approximately $37.8 million. The Company’s losses have resulted principally from costs incurred in connection with its former drug discovery research and development activities and from general and administrative costs associated with the Company’s operations. These costs have exceeded the Company’s revenues and interest income. As a result of the sale of its drug discovery assets and the cessation of its internal drug discovery operations and research efforts for collaborative partners, the Company ceased to have research funding revenues and substantially reduced its operating expenses. The Company expects to generate revenues in the future only if it is able to profit from its real estate operations.”

Wednesday, September 3

Foreign Stocks Pink Sheet Listed: NCAV > Price


Click for quotes on stock below

Click for more details
























Asian Citrus Holdings Limited (ACTFF): 

"Asian Citrus Holdings Ltd is engaged in planting, cultivation and selling of agricultural produce, manufacturing and sale of fruit juice concentrates, fruit purees and frozen fruits and vegetables." Source Morningstar

Local Symbol:  AAB.TO

Country: Hong Kong














to be competed