Each idea has unique value attributes. These stocks may be ugly, just not as ugly as their price performance.
Value attributes considered , discounted relative
and historical valuations, aggressive share count reductions, current strong
insider buying, real estate recorded below fair market value, large gross profits
relative to enterprise value, outsize price under performance versus the market and
industry.
GSE Systems Inc. (GVP) 1.70
GSE Systems provides a wide range of simulation and training solutions to the global energy (nuclear and non-nuclear) industry."The company has strategic alliances with All Russian Research Institute for Nuclear Power Plant Operation; Kurchatov Institute; Risk Engineering Ltd.; Samsung Electronics; Toyo Engineering Corporation; UNIS; and Westinghouse Electric Company LLC"
Historically low valuations for sales and
book
GSE Systems provides a wide range of simulation and training solutions to the global energy (nuclear and non-nuclear) industry."The company has strategic alliances with All Russian Research Institute for Nuclear Power Plant Operation; Kurchatov Institute; Risk Engineering Ltd.; Samsung Electronics; Toyo Engineering Corporation; UNIS; and Westinghouse Electric Company LLC"
The following value attributes may interest
investors for this tiny micro cap.
Strong balance sheet (cash per share .98, BV
= 1.70)
Significant
stock under performance (one year -30%)
Moat
Share buybacks (share count reduction from
2010)
Private equity firm NGP Energy Technology
Partners has 15% stake coupled with board seat
Market Cap: 31.12M , Enterprise
Value: 12.85M
Price/Sales: 0.64
, Price/Book: 1.00
Enterprise Value/Revenue: 0.27
Total Cash Per Share : 0.98, Total Debt : 0.00
Current Ratio : 2.52 ,Book Value Per Share: 1.70
52-Week Change: -19.82%
52-Week High:2.37 ,52-Week Low: 1.40
% Held by Insiders:35.70% , % Held by Institutions:30.20%
Ruby Tuesday, Inc. (RT) 5.41
Ruby Tuesday is a
distressed restaurant chain founded in 1920. The company has 779 Ruby Tuesday
and Lime Fresh locations.
RT is interesting
for multiple reasons.
hated by Wall
Street,
-32% 52 week
return,
41% off 52 week
high,
valuable real
estate on the books below FMV, brand name,
low industry P/B
at .79,
historically cheap
for P/S and P/B,
share count reduced
from 2010 to the most recent quarter,
strong operational
mean reversion candidate.
There is an added
margin of safety provided by their large owned real estate portfolio. 324
restaurants are owned by RT including the land and buildings. Restaurant
Support Services Center in Maryville, Tennessee, is owned and opened in fiscal
1998.
Today I was buying
shares from 5.42 to 5.65. Investors may see an arbitrage opportunity. What I
mean if the stock is oversold, although it may continue to get oversold. An opportunity
RT moves off its historical low P/B and P/S is realistic. The negative news and
depressed stock price less emphasized with any optimistic news. Wall Street’s negative
view on the stock, coupled with negative company news such as the closing of 30
locations, posting last month a 7.8% plunge in comps for the
quarter may have created an opportunity even if it’s a cigar butt.
Taken from Restaurant News:
Ruby Tuesday exploring strategic
alternatives reported December, 2013.
Decmber 9, 2013 Restaurant
news reported “Goldman Sachs likely helping casual-dining company seek
leveraged buyout”
“According to
unnamed sources in the report, the Maryville, Tenn.-based casual-dining chain
is likely seeking a leveraged buyout. The report did not speculate on a
timeframe.”
“The company said
it had hired a consulting firm to identify and implement other cost-cutting
measures. Ruby Tuesday expects to trim about $6 million in general and
administrative expenses per year, starting in fiscal 2015.
The brand has also seen some executive changes. Earlier this year, board chairman Matthew Drapkin resigned and was replaced by Buettgen.”
The brand has also seen some executive changes. Earlier this year, board chairman Matthew Drapkin resigned and was replaced by Buettgen.”
“Luby's, Inc. was founded in 1947 in San Antonio, Texas. The
Company was incorporated in Texas in 1959, with nine cafeterias in various
locations, under the name Cafeterias, Inc. It is a multi-branded company
operating in the restaurant industry and the contract food services industry.
Its primary brands include Luby’s Cafeteria, Luby’s Culinary Contract Services,
Cheeseburger in Paradise and Fuddrucker. Its other brands are Bob Luby’s
Seafood, Luby’s, Etc. and Koo Koo Roo Chicken Bistro. As of November 4, 2013,
it operated 179 restaurants located throughout the United States. These
establishments are located in close proximity to retail centers, business
developments and residential areas. Of the 179 restaurants, 86 are located on
property that the Company’s own and 93 are located on leased premises. Two restaurants
are located on the same property. As of November 4, 2013, it operated culinary
contract services at 21 locations; 17 in the Houston, Texas area, 3 in
Louisiana and 1 in Austin, Texas. Its Culinary Contract Services provides food
service management to healthcare, educational and corporate dining facilities.
Thirty franchise owners each own one restaurant. The remaining 19 franchise
owners each own two to eight restaurants.”MSN Finance
Luby’s owns most its real-estate.
LUB
owns the land and buildings on 70 Luby’s cafeteria and 16 Fuddrucker
restaurants. Five owned other-use properties; one is used as a bake shop that
supports the baked products for operating restaurants
Market Cap: 200.64M ,Enterprise Value: 226.23M
Price/Sales: 0.51 ,Price/Book: 1.15
Enterprise Value/Revenue:
0.57 ,Enterprise Value/EBITDA:
10.08
Qtrly Revenue Growth(yoy): 9.90%
Book Value Per Share :6.23
52-Week Change: 4.50%
52-Week High: 9.19 ,52-Week
Low: 6.49
% Held by Insiders: 29.85% ,% Held by Institutions: 46.40%
Abercrombie amp; Fitch Co. (ANF) 35.41
Abercrombie Fitch is a specialty
retailer, mall-based young women apparel. Currently trading at EV/EBITDA of only 4.87. 52 week change is -29% with
a historical low P/S value at .63.
Aggressive share count reduction from 2011 share count of 88,061,000 to the current balance of 77,776,000.
Market Cap: 2.67B , Enterprise Value: 2.65B
Price/Sales: 0.63 , Price/Book: 1.61
Enterprise Value/Revenue: 0.62 , Enterprise Value/EBITDA: 4.87
Profit Margin: 3.40%
, Operating Margin: 7.10%
Return on Assets: 6.67%
Qtrly Revenue Growth: -11.70%
Cash Per Share:3.37 , Current Ratio:2.13
Book Value Per Share : 21.93
52-Week Change:-30.14%
52-Week High: 55.23
, 52-Week Low :31.14
% Held by Insiders:
2.09% , % Held by Institutions: 98.50%
Short % of Float: 20.90%
Annual Dividend Yield: 2.30%
Asta Funding Inc. (ASFI) 8.25
Asta purchases distressed receivables primarily credit consumer
debt.
TTM book value increased 15% as the 52 week stock price decline
by -13%. Furthermore , shareholder friendly
management aggressively reduced share count for TTM. Next the stock trades at a
large discount to a growing 13.09 book value.
The current stock price is $8.25,
01/25/14. Share count dropped 8% from 09/12 balance of 14,077,650 to 12,952,150
09/13.
The strong FCF supports a small current 3.75% dividend yield.
Market Cap: 107.04M , Enterprise Value: 107.62M
Price/Book : 0.63 , Enterprise Value/EBITDA : 17.79
Profit Margin:
6.46% ,Operating Margin 13.22%
Qtrly Revenue Growth:
-17.40% ,
Total Cash: 35.18M , Cash Per Share : 2.71
Current Ratio :42.46 Book Value Per Share :13.09
Operating Cash Flow(ttm):19.08M ,Free Cash Flow
(ttm):34.64M
52-Week Change:-12.61% 52-Week High : 9.80
, 52-Week Low:7.94
% Held by Insiders:41.28% ,% Held by Institutions:38.60%
5 Year Average Dividend Yield: 1.50% , Payout Ratio4: 38.00%
Spark Networks, Inc. (LOV) 6.05
Spark Networks (LOV)owns high
cash generating online dating businesses. One entity Jdate.com is a stable high growth cash machine with a strong
moat.
I first discovered and wrote about LOV way back January 2010 at
2.95 on Seeking Alpha. The stock has not performed as I expected. My LOV position
was sold over a year ago.
LOV has received buyout offers. “Rumor has it” offers less than 6 won’t be considered. The
current stock price is 6.05.
Last week’s continued strong insider
from known value shop Osmium Partners is part of the rationale for today’s mention.
Osmium was buying shares for 6.10, 6.12, 6.16. Osmium now owns 16%.They may take a more active role as a board member.