Ok so this is not about Molopo, however it is about a company which use to have the biggest shareholding in Molopo prior. So most people would be interested in this. It is about Orion Equities, and Bentley Capital.
If you think the reasons below are valid. Then you should not sell your shares.
5 reasons why Orion Equities Is Undervalued By 500% (ASX CODE OEQ).
Orion own 27.32% of Bentley Capital (ASX BEL). Or 20,513,783 shares. Currently trading at 0.14 Cents this is 2.87 Million. But I think Bentley Capital is cheap.
> Lets look at Bentley Capital on June 30th each year
June 30th 2012 Bentley traded at 20.0 million, its assets were 20.5 million a 2.43% discount. June 30th 2013 Bentley traded at 18.0 million, its assets were 18.9 million a 4.76% discount. June 30th 2014 Bentley traded at 16.8 million, its assets were 17.35 million a 2.43% discount. Currently Bentley traded at 10.4 million, its assets are 17.91 million a 66% discount!
> Ok lets look at Bentleys Asserts.
Cash$6.77 Million
CBG Australian Equity Fund (Fund management) $5.72 Million
Asx Listed Securities Including Westpac, Nab, BHP $2.99 Million
Strike Resources (SRK =ASX) $2.79 Million
Debt / Liabilities ($0.34) Million
Total$17.91 Million
But this is not the full story. Bentley own $2.79 million in Strike Resources or 36.16% of strike. They purchased this in a takeover in 2015. They purchased at 0.055 cents. However the independent report said that strike is worth between 0.084 cents per share (Low) and 0.137 (high) 14/08/2015. So the strike part of the above assets you can change $2.79 million and insert $4.41 million at the low end and $5.88 million at the high end. So even at the low end of $4.41 million. Bentley now has NOT $17.91 million in assets but $19.53 million. Thus making the 66% discount bigger! Or in my opinion making Bentley conservatively worth around $0.26 per share.
2. Orion own a rental property in WA valued by the company at $1.35 million. Ok but this was purchased in 2006 for $3.6 million. What real estate do you know that has gone down in value in this time? I find this very hard to believe that this property is worth anything less than the amount they paid for it. Or perhaps more. Why do they put such a low value on it? We will cover that at the end.
3. They own a non working farm in WA which they have put a value of $2.0 million dollars on. I have no special insight to this but would suggest that this is about right.
4. They have money in a managed fund which is $287,000. And own some shares outright for $68,000. Giving you a total of $355,000.
5. And finally they own $520,000 in strike resources. Again they have put these shares at a value of $0.048 cents. But if you value them at the low end of the independent experts report then the value comes in at 0.084 cents or a total value of $910,000. So lets add it all up and see what we get.
Cash$147,000
Bentley at 0.26 cents per share or where I have valued them$5,333,583
WA Farm$2,000,000
Strike At The Low End Of The Independent Report eg 0.084 $910,000
Investment In Managed Funds And Other Shares $355,000
WA Rental Property $3,600,000
Giving you a grand total of $12,345,583
Ok so what is the share price $0.13 cents or to buy the whole company $2.00 Million
But if you divide $12.3 million by the shares outstanding 15,634,051 you get $0.78 cents. Or a 500% difference between the purchase price at $0.13 and the break up value of $0.78 cents. Huge upside, little risk. Make up your own mind.
And why have management valued the rental property at $1.35 million vs the purchase price of $3.60 million in 2006. Because in my opinion, the company has been purchasing its own shares in 2015. Better to purchase their shares at $0.13 to $0.20 cents than $0.78.
MPO Price at posting:
12.8¢ Sentiment: Hold Disclosure: Held
