Tonight I will
quickly start a list of value based ideas that are aggressively reducing their share
count. I keep putting off these posts. Tomorrow I will post supporting details. But I still want to introduce some of the most ruthless cannibals.
(ITEX): ITEX Corp is deep value idea engaged in the business of battering. For over 30
years ITEX has created a distribution channel for business to exchange services
or goods with battering to preserve cash flow. Members utilize digital currency
(ITEX dollars) to exchange goods and services rather than use cash.
The reported share
count last year January 2012 was 3,636,000. The tender offer to purchase their
stock for 4.20 per share along with share buybacks quickly and aggressively reduced
the share count to 2,616,000. 28% of the share count was reduced!Then on February
26,2013 the board approved a 25% increase in the company’s quarterly dividend
to a new quarterly dividend of .05 per share! If we apply that to the current
price the dividend yield based on today’s closing price would be 5.41%!
Results were
reported Thursday March 14.
- Income from Operations increased
76% to $499,000 compared to $283,000
- Earnings per share increased 17%
to $0.14 compared to $0.12
- Revenue decreased 6% to $3,960,000
compared to $4,229,000
- SG&A expenses decreased 34% to
$368,000 compared to $558,000
- Cash increased 27% to $2,461,000
compared to $1,942,000 at fiscal year-end July 31
- Paid a $0.04 per share cash
dividend.
Thanks to the years
of hard work by activist David Polonitza ITEX is moving in the right direction.
Management, insiders, employees and shareholders are beginning to see the
benefits of his work. I believe they are now positioned to focus on operations and
the future of the company as all stakeholders should benefit.
ITEX reported quarterly operating income before
depreciation of 360M,464M, 398M,564M or 1,786,000 for the TTM/ .6829 per share based recent reported share count of 2,615,000. Current EV per
share is 3.50. The stock is now trading
at just over 5 times operating income less depreciation.
Market Cap: 9.68M,
Enterprise Value: 7.39M
Price/Sales: 0.62,
Price/Book: 0.87
ITEX was listed January 16 in the post "illiquid stocks for outsized returns?"
ITEX was listed January 16 in the post "illiquid stocks for outsized returns?"
(JAKK) JAKKS
Pacific... “JAKKS Pacific,
Inc. designs, produces, and sells toys and consumer products in the United
States and internationally. It provides traditional toys and electronics
products.”
Market Cap: 245.98M, Enterprise Value:
214.17M
Price/Sales: 0.36, Price/Book: 1.16
Enterprise Value/Revenue: 0.32,
Enterprise Value/EBITDA: 13.57
52 Week Stock Return was negative, -
33. %
Aggressive share count reduction as
the stock trades near or at historical lows based on sales and book to price.
Share count was 27.64M at the end of
2008. This was reduced by an impressive 21% to the current balance of 22.00M.
Note as the price dropped over the TTM
from a 52 week high of 19.39 to yesterday’s opening price of 10.82,
management aggressively cannibalized their own company . Share count was
reduced by 15% from the prior year count of 25.94M to 22.00M.
(KSS) KSS: Kohl's
Enterprise Value/Revenue:0.79
Enterprise Value/EBITDA:5.59
Kohls operates
department stores in the USA. They have 1,146 store in 49 state along with the
option to shopt in their online store. The company was founded in 1962.
KSS currently
trades at attractive historical valuation based on P/B or P/S. They not only
trade near their historical low on valuation but most optimistic valuation for
their department store industry.
EV/EBIT is 9.68
and lowest in their industry. YOY the revenue increased by 5.5%. Enterprise / NTA
less cash is at 1.35. KSS is near 52 week low and unjustly underperforming
their industry peers based on the 52 week stock return excluding SHLD and JCP.
Management has
wisely purchased back their stock at these cheap valuations.
October 2011 the shares
outstanding were 264,000,000. February 2013 this balance was reduced by 8.5% to
241,500,000. The 2010 share count yearend balance of 305,000,000 was reduced by
15.50% to the current 241,500,000 share count.
Current dividend
yield for this institutionally disliked mid cap value is 2.90%. Shorts as a
percentage of the float is 7.90%.
Market Cap:11.20B, Enterprise
Value:15.21B
Price/Sales:0.58 ,Price/Book:1.84Enterprise Value/Revenue:0.79
Enterprise Value/EBITDA:5.59
