Originally posted by kittyboomboom
Balance sheet is holding a dramatically increased level of stock but apart from that that is clean as a whistle.
Declining sales with stock building up that fast is not a good combo but this is priced at almost certain failure which is just silly IMO.
Even so let say they struggle to sell all of stock at cost/net realizable value and instead only able to recoup at 80% of value, that would still mean circa 80 82 million in inventory value. There is no debt and net cash of 14 million. Property plant and equipment is at 90 million I think apologies don't have annual report in front of me.
Trolling through the report I think I worked out liquidation value of about 90 - 100 million after discounting for possible obsolete inventory and property plant and equipment not realizing net realizable value etc etc.
I see a decent safety net which protects my capital. What Current NTA? $4.5? Trading at under half of NTA, still profitable, will definitely pay a dividend as they have no debt so unless they have use for that cash otherwise we will definitely get a dividend. I see very little if any risk here... Capital protected with upside potential if they can surprise with any margin on a gross and ebitda line. Sound investment from my perspective
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