I'm not sure the model is broken, after all, it's not too...

I'm not sure the model is broken, after all, it's not too dissimilar to Buffett's model of acquiring part or whole businesses and letting management do its job. HNG management have however made really bad investment decisions. I think it comes from their decision to target import/distribution businesses, which tend to be low quality, moatless businesses. I mean, their lighting distribution business basically had sales halve, and profits disappear, when a bunch of employees walked out the door. That's not a sign of a strong moated business. That said, I think if you pay a low enough multiple for these businesses you can still make money.

I do think it wouldn't hurt to overhaul management, even though that will never happen due to their shareholding size. They're not adding much value. Corporate head office expenses are something like $2m a year and I don't really know what shareholders are getting for that money (except wealth destruction in years past). In my eyes, the dream scenario would be for the company to liquidate itself, sack everyone in corporate and sell off its subsidiaries. Mountcastle alone should be worth $20m+ to HNG. But alas that will never happen, not least because there's no reason for directors to get off the gravy train of board fees while shareholders cop the losses.