TANDY LEATHER FACTORY (TLF): Intrinsic Value Discount.

Tandy Leather, symbol TLF, founded in 1919, is a consistently profitable leather crafting retail leader. Tandy sells leather and leather craft-related items primarily through retail stores, websites, or direct account representatives. Tandy has 101 stores in 40 states, six provinces in Canada, and one store in Spain. Several smaller, privately family owned competitors exist, including Double Eagle Leathersmith, Montana Leather Company, and Weaver Leather Supply.

The table above illustrates a few of Tandy's unique values and attributes. Such as EV/OI = 8.8, P/NCAV = 1.13, and 85.50M cumulative EBIT over the prior 15 years and 121.28M for EBITDA. This is versus an enterprise value of 39M. 


Tandy Leather reported fourth-quarter and year-end 2023 results on 03/22/24.  For the year ending 2023, Tandy shows continued profit growth and cash in a difficult retail environment with high inflation. Net income was $3.80 million, an increase of $1.20 million compared to the year ending 2022. Gross profit was relatively flat as margins improved from 57.90% in 2022 to 59.30% in 2023. Operating expenses declined 9.70% to a stable operating expense of 40 million. Cash grew to 12.20 million from 8 million in 2022. After adjusting for stock compensation, EBITDA was 6.50 million.

TLF is an intrinsically and relatively cheap investment based on consistent profitable FCF and growing margins. Deep value-based and long term owners provide a margin of safety and offer constructive activism. Bandera (Jeff Gramm) owns 34.40%, JCP Investment(James Pappas) 10.04%, and First Foundation (Eric Speron )10%. CEO Janet Carr owns 4.50%.

Over the past two years, investors have overlooked hidden value creation, including implementing new systems, shuttering unprofitable stores, and improving online distribution processes. Additionally, optionality exists as their fully owned corporate headquarters has been listed with a broker for sale. A +12 million net profit is a reasonable expectation if they sell. The sale of their headquarters will likely increase the price per share after a special or continued commitment to dividends. 

On a relative valuation basis, only 33 industry specialty retailers reported positive EBITDA out of 47 USA-headquartered companies. The industry average EV/Revenue was 1.92 versus TLF's .49. And an average EV/EBITDA was 52.46 versus TLF's 5.15.

Positive Yelp reviews

The picture above is from a Yelp review (Carol I from San Antonio, TX): "Staff has always been friendly and helpful the couple of times I've stopped in.".

"Great customer service, they even gave me a demonstration on how to use the splitter I bought." Johnny G.San Antonio,

"Amazing customer service, …was patient and helped me to understand all the necessities in order start this project." Ashley P. Austin, TX

"Definitely 5 stars. I have used this store 2 times once in person 1 time on the phone. The people here are GREAT!" Kenneth S.San Francisco, CA

Tandy operations have favorable unit economics and the resources to grow. Return on investment after opening a retail store in a few years with a cheap lease off the main strip and $200K in inventory.


Sale of corporate headquarters now listed or secure a loan on the debt free headquarters worth ~ +15M to initiate a dividend.

Continued profitable cash accumulation with the market shift towards buying smaller profitable companies. 

RE per share increased 12.30% from the year ending 2021 to MRQ versus an EV per share decline of -19.22%. Tandy generated 35.61 million in FCF in the last fifteen years and 22.40 million in the last ten years.

A tiny 40% of the shares outstanding are in the float. 

Activist shareholders could force a sale, go private, or other strategic alternatives. Bandera (Jeff Gramm) owns 34% of the shares outstanding and is Chairman of the Board and a proven capital allocator with an average purchase price of 7.03. JCP (James Pappas) (Outside Director) owns 10.40% at an average price of $4.67/Share. FIRST FOUNDATION ADVISORS (Eric Speron) Average Price $4.69/Share. First Foundation (Eric Speron) Total Return Fund Average Price $4.82/share director of Compensation Committee. CEO (Inside Director) Janett Carr owns 4.40%.

Continued inflation and weaker retail environment.

Strong financials, debt-free, consistently profitable free cash flow, and a margin of safety. The company is undervalued based on its consistent FCF (free cash flow) and unlocked real estate value. Additionally, the CEO and board are incentivized with skin in the game with stock purchases above the current price. 

Long TLF


Illiquid SPECULATION; Karnalyte Resources (KRN.TO / KRLTF)

Karnalyte Resources (KRN.TO / KRLTF) was founded in 2007 and listed on the Toronto Stock Exchange in December 2010. The $65-million IPO raised $14 million more than expected.

KRLTF : Price = .15, market cap = 9.86M, enterprise value = 7.47M as of 03/11/24

Based on the 2016 National Instrument 43-101 Technical Report filed at sedar.com their Wynyard Project is projected to mine 2.125 million tons of potash annually. Additionally, a nitrogen project exists. Approximately 700 metric tons of ammonia and 1,200 metric tons of urea per day can be produced. Nitrogen's target customer is independent fertilizer wholesalers in Central Saskatchewan. The 43-101 report covers geology, mining, recovery methods, required infrastructure, mineral resources, and mineral reserves estimations.

Further, Fortune India 500 Gujarat State Fertilizers & Chemicals (GSFC) is Karnalyte's largest shareholder. As of 2024, GFSC still supports Wynyard Potash and Proteus Nitrogen projects. Gujarat State Fertilizers & Chemicals has contractually guaranteed a long term availability to purchase Karnalyte's potash. Detailed engineering has been completed, and all environmental permits remain valid. Funding and market conditions determine Karnalyte's progress.

Karnalyte Resources' investment potential is impressive.

Karnalyte's largest shareholder is Indian agribusiness giant Gujarat State Fertilizers & Chemicals (GSFC). A placement happened in January 2013 for 8.15 Canadian Dollars per share. Karnalyte's current enterprise value is 5.74M, and its market cap is 7.51 M. This compares favorably to the 19.80% ownership or a 40 million GFSC 2013 investment. 

Additional evidence of GSFC's commitment was participation in the rights offering on August 3, 2022. In this offering, GSFC acquired an additional 9,100,000 shares at $0.35 each. GSFC owned 38.73% before the offering, but ownership is now 47.73% with this purchase. This strategic move boosted Karnalyte's capital by $3.862 million. The additional investment allowed GFSC to increase its board representation.

Potential valuation:

In June 2016, Karnalyte received the National Instrument 43-101 Technical Report for its Wynyard Potash Project. The report verified a staggering amount of mineral assets. 

Potash Project (Bankable Feasibility Study in Canadian dollars)

“NPV (8% ) $3.39 Billion for all 3 phases (after tax), IRR 19.1% for 3 Phases, 2.125 million tpy project (after tax), CAPEX for Phase 1 $789 Million ($2.396 Billion for all 3 phases) Cost per installed tonne of Capacity $1,262 for Phase 1 ($1127 for all 3 phases)Proven & Probable Reserves of 147 million tonnes KCl, Estimated Mine Life over 70 years for 3 Phases, 2.125 million tpy project

Magnesium Project (Preliminary Feasibility Study)

"Considers annual production of 100,000 tonnes of MgCl2 brine and 104,000 tonnes of 99+% Hydromagnesite (BMC). Construction assumed after phase 1 of potash)"

"NPV (10%) $512 Million (after tax), IRR 26.1% (after tax),CAPEX (additional to Phase 1) $171 million,OPEX for MgCl2 Brine $7.01 per tonne,OPEX for Hydromagnesite $302.01 per tonne,Probable Reserves for MgCl2 694.6 million tonnes of carnallitite @ 22.1% MgCl2, equivalent to 153.3 million tonnes “mineable” and 7.9 million tonnes of product"

Click here to review the National Instrument 43-101 Technical Report. The 43-101 report details property data verification, metallurgical testing, mineral resource/reserve estimates, recovery methods, market studies/contracts, capital/operating costs, and economic analysis.

Karnalyte's mineral assets have staggering potential. There is a possibility of billions in potash and magnesium before operation costs. "There's enough potash there to sustain the world for I don't know how many years," said Dave Van Dam, a prominent Kenora businessman and Karnalyte shareholder. "It's monstrous."

A Karnalyte board meeting was scheduled for November 2003 in Saskatoon, Canada. However, GFSC's executives abruptly canceled their flights from India over the government's public disagreement with the killing of a Sikh leader on Canadian soil. KRN's board has two Indian executives from GFSC and one Indian banker.

 "We were preparing to welcome our board colleagues from India for a visit to Canada this week. However, they canceled their trip due to tensions that arose and escalated last week," Karnalyte's Interim Chief Executive Officer Danielle Favreau said in an email. "We hope to reschedule their visit soon." 

Karnalyte's chairman is Vishvesh Nanavaty, Gujarat State Fertilizer's (GFSC) chief financial officer. Director Dilip Pathakjee is a senior vice president at GFSC. Another board member is Indian international banker D.C. Anjaria.GFSC is financially committed and counting on future potash supplies despite recent diplomatic disagreements over Sikh Nijjar's slaying.

As of June 30, 2023, Karnalyte has zero debt and $2.7 million in cash and net working capital.


In March 2016, Karnalyte Resources announced a deal with GSFC to finance the construction of its 625,000 tons per year potash mine in Wynyard, Saskatchewan. Besides that, Karnalyte plans to spin off its secondary mineral assets and unexplored lands into separate companies so shareholders can profit. The GFSC partnership aims to finance Phase 1 of the potash mine while leveraging Karnalyte's non-potash assets.

Unfortunately, the 2016 $700 million financing deal failed. The negotiations ended without agreeing on the governance issues and the terms for spinning out Karnalyte's secondary minerals, including magnesium into a separate entity. Further, KRN did not agree to give up 51% of the voting power to GFSC.

Tiny Insider buys from board member Ritu Malhotra 51,000 shares for .19 on 07/20/23.

As of June 30, 2023, the company had $2.7 million in cash and positive net working capital of $2.7 million, with no debt. No debt eliminates bankruptcy if short-term financing is needed next year.

Karnalyte is sitting on potash and magnesium resources that are worth billions before construction costs. 


GFSC can hold up the project for years. And KRN likely needs cash around +1 years.


Need for financing.

Karnalyte (KRN.TO KRLTF) has been distracted by lawsuits alleging governance irregularities and improper lobbying.


Karnalyte's investment thesis is simple. GFSC wants Karnalyte's Potash and Nitrogen assets. So, GFSC initiated a position in 2013 when it acquired 19.80% of Karnalyte's outstanding shares at 8.15 per share or 40 million Canadian dollars. GFSC's average cost exceeds the current market price of 7.50 million USD. GFSC now controls 47.73% after an August 2022 secondary offering.

GFSC's CFO, Vishvesh D. Nanavaty, is now Karnalyte's board chairman. Dilip V. Pathakjee (an Indian executive at GFSC) and D.C. Anjaria, an Indian banking executive, are also board members. Canadian business leader Ritu Malhotra is the latest board member. The board construction supports the thesis that GFSC will finance current operations as they attempted with a failed 2016 700M finance proposal.

The 700M USD 2016 financing agreement fell through because GFSC wanted 51% of KRN and access to a spin-off of their nitrogen assets. This disagreement is likely resolved. 

The technical report demonstrates billions of dollars worth of assets before construction costs. Detailed engineering has been completed, and all environmental permits remain valid. Funding and market conditions determine Karnalyte's progress. KRN is not a venture-listed company but instead listed on the Toronto exchange, Big Four auditor (KPMG), and is currently working with UK global consulting and engineering company Wood PLC to evaluate additional cost savings on an ongoing basis to ensure maximum value for investors.

GFSC didn't spend ~$45 million without seeing its investment return in potash and minerals or serving on the KRN board. The sleeping giant KRN has a possible billion dollars of assets supported by the National Instrument 43-101 Technical Report. And $100 million had already been invested in the project.

Karnalyte is SPECULATIVE!!

 Although the current attributes compare favorably to KRLTF's current price = .15, market cap = 9.86M, and enterprise value = 7.47M

Catalyst: Financing



Joint Corp (JYNT): From Growth to Deep Value


The Joint Corporation (JYNT) is the largest domestic franchisor and operator of chiropractic clinics. The company aims to provide affordable chiropractic services in this fragmented market using a private pay, noninsurance, cash model. Joint has 900 locations in the USA and plans to open 100-120 newly franchised clinics in 2023.


With double-digit top line growth, Joint is also undergoing financial and strategic changes. As the largest chiropractic provider, it's positioned to capture a significant share of this fragmented market. A strong investable opportunity exists due to dramatic oversold conditions, financial improvements, and operational flexibility. Management is committed to selling nonperforming assets, franchising, and reducing expenses.

The valuation has materially improved, mainly driven by JYNT's drop in market value. This price decline is in the face of consistent double digit top line growth. This progress and a decline in the company's market value creates an investable opportunity. Many low hanging operational levers remain to enhance shareholder value.

A closer look at Q2 2023 reported in September.

In Q2 2023, The Joint Chiropractic revenue grew double digit. Yet, management recognizes they needed to make operational changes. To partially address these concerns, Lori Abou Habib was appointed to lead marketing.

 Joint Chiropractic focuses on short appointments and affordability. This distinct approach attracts new patients. They also emphasize providing treatments like standard adjustments rather than complex clinical diagnoses. And they don't accept insurance.

While JYNT is making internal changes. External accolades from reputable franchise publications and rankings affirm its strong market position. JYNT's mix of operational flexibility and market recognition suggests undervaluation.

Preliminary revenue for Q2 2023 increased by 18% compared to the prior year quarter. Growth improved performance in franchised and company owned clinics. Company owned clinics (+23%) and franchise operations (+11%) drove the revenue increase. Preliminary adjusted EBITDA reached $3.2 million, a 23% increase over the same period last year. Cost control measures such as a hiring freeze, reduced travel expenses and canceled nonessential projects were implemented. Further, the divestiture of specific corporate clinics optimizes productivity and reduces SGA. The financial guidance for 2023 has been revised downward due to changes in accounting, divestiture plans, and economic factors. A renewed focus on cost reduction helps prepare for economic uncertainty and lower revenue expectations.

Clinics had a negative 1% decline in sales for clinics operating beyond 48 months. Management expects these challenges to persist in the second half, but options exist to counter them. Their key metrics - new patient count, conversion rates, and attrition - show promise, with attrition and conversion improving. However, their new patient count is slowing. To address this, Lori oversees their marketing efforts, focusing on two key sources of new patients: referrals and local marketing initiatives. 30% of new patients come from referrals. Their clinics cater to those within a 5- to 15-minute radius, and they must educate this local audience about their services. Through traditional means like coupon outreach to schools and gyms.

In summary, The Joint faces challenges but is working to overcome them.


The Joint faces internal (underperforming owned locations) and external challenges (economic/ inflation). But the market undervalues their growth, unique niche, flexibility, operational leverage, financial stability, and mean reversion.

The company is transitioning and adjusting its strategy on a large book of business of 111.74M in revenues for the trailing twelve months.  Lori Abou Habib was appointed Chief Marketing Officer. Prior to this, she worked at the SONIC Drive-In Franchise Brand. Her franchising expertise complements the refined strategy.

The Joint Chiropractic moved up to 52nd on Entrepreneur Magazine's 2023 Franchise 500 from 57th in 2022. This ranking evaluates cost, growth, and brand strength. The Joint is recognized by Forbes, Fortune, and Franchise Times for its growth and approach. In 2023, it was 18th on Franchise Times' Fast & Serious list. The Joint was also 1st on Forbes' 2022 Best Small Companies, 3rd on Fortune's Fastest-Growing Companies, and consistently ranks high on franchise lists. In 2023, it was named a Top Franchise by Franchise Business Review and was in their 2022 Most Profitable Franchises report.

Operating leverage is powerful with little or no costs for each new patient.

Aggressive insider buying from Bandera. In 2023, Bandera purchased 1,472,047 shares for $15,476,620 at an average cost of $10.51 per share. In total, Bandera owns 3,937,296 shares, or 26.69% of shares outstanding or 37.28% of float.

Mean reverting attributes such as a decline of -86% in EV per share from year end 2021 to today.

Valuation ratios have improved significantly. EV/Revenue at 1.26 improved 89% from 2021 amount of 11.89. The Price/ Operating cash flow is 7.72, an improvement from the 70.86 balance for 2021.

F score of 8 is a historical high. An increase in the following drove the F score of 8. Positive change in ROA, cash flow return on assets (CFROA) > ROA, positive change in return on assets, cash flow return on assets greater than the return on assets, positive change in working capital ratio, increase in gross margins, positive change in asset turnover. Two points were lost on the F score due to a slight increase in shares outstanding, and a long term debt to average total assets increase.

Opportunities for cost reduction. Hiring freezes, selling/closing corporate own locations, reduced travel expenses, and canceled non-essential projects will positively impact the bottom line. These steps are vital in curbing general administrative expenses. SGA per share increased 47.37% from 6.36 for the TTM versus 4.32 for 2021.

The Joint is transitioning toward an asset light franchise model. Asset depreciation and cost inflation will improve after the sale or closing of nonperforming corporate owned locations. 


Several factors drive investor's concern and has a significant short position at 6.26% of the float. In 2021 and 2022, the Joint had to restate its financial statements. And reported a material weakness in their internal controls. Further, implementing updated accounting methods may impact reported earnings. The accounting change is tied to the reacquisition of regional developer rights and transfer pricing. Also, there are concerns about the saturation of JYNT's clinics in certain areas.

Competitors might replicate JYNT's business model. However, JYNT doesn't compete with regional or national entities. A short report forecasted a decrease in the company's stock price. This report negatively influenced the stock price. However, the short report has been challenged as misleading. 

Skepticism about chiropractic care may contribute to unfavorable stock valuations. There are concerns about new market entrants and regulatory changes.

Compared to prior years, stock compensation has grown 23% from 2021, and financial liquidity using the quick ratio declined 28% from 1.37 in 2021 to current balance of .90. SGA per share grew +47.37% from 2021 to TTM versus revenue per share improvement of +40%. 

JYNT has a promising model. However, increased competition is real if other chiropractors adopt the same business model.


A valuation analysis can help determine JYNT's expected price by analyzing its intrinsic, relative, and historical value.

I used a DCF to calculate intrinsic value. It shows a market price slightly above the estimated intrinsic value using historical earnings. But the current market value is significantly discounted if we use average earnings from 2019 to 2021. Also, using free cash flow for a DCF shows a discounted market price to its intrinsic value. Historical earnings have not been consistent or predictable. This lowers the intrinsic estimate compared to using relative and historical valuations.

Earnings Power Value (EPV) exceeds the current price. EPV uses current earnings without considering growth. The assumption is the business will maintain its earnings forever, with no growth/change.

Using historical multiples like P/E, P/B, P/FCF, P/S, coupled with consistent double digit growth shows JYNT market price trades at a material discount.

I believe JYNT's stock price is trading below its fair market value. For me, this high risk stock is a buy.  However, I will add on weakness given the economic challenges and operational changes. Because in the next six months, we won't see the full benefits of their operational changes.


The Joint Corporation is the largest domestic chiropractic clinic franchisor. JYNT is a risky stock. But, with double digit consistent top line growth, near profitability, and financial stability, the stock is a buy after the irrational 86% decline in EV per share from 2021.Along with that market decline, revenue per share grew 40% from 2021 and 86.38% from 2020. Further, valuation ratios are at historical lows and relatively cheap. Entrepreneur Magazine's rankings and accolades from Forbes, Fortune, and Franchise Times have recognized the Joint's accomplishments.

With aggressive buying from Bandera, cost cutting measures and growth, their future looks promising.

Don't forget JYNT is a high-risk stock. Past financial restatements for 2021 and 2020, local market saturation, and weakening financial position present risks. However, the company's move towards an asset light franchise business model underscores its optionality. While valuation analysis suggests JYNT is undervalued, the full benefits of their recent changes and changes over the next quarter will likely be more visible in the longer term. JYNT is a potentially rewarding investment opportunity.

Supporting data:


Alpha Pro Tech (APT): An Intelligent Investment


Alpha Pro Tech is an intelligent deep value investment in the tradition of Ben Graham. It has a $50 million market capitalization with an enterprise value of $36 million. Debt is a small lease.

The stock offers a unique investment opportunity - a strong financial position supported by 10 years of FCF profits and selling below its NCAV.

The company derives its revenue from two segments -- building supply products(~60%) and disposable protective attire(~40%). In most industries, disposable protective apparel is required.

The current valuation more than accounts for potential slowdowns. Management offers shareholders a satisfactory return through consistent share repurchases. 

Company Description

Alpha Pro Tech (NYSE: APT) develops, manufactures, and markets building supply products. Their other segment is disposable protective attire (DPA). Technology, industrial and medical industries use protective apparel garments such as coveralls, face masks, gloves, and shields. Historically, the building supply segment accounted for 60% of total revenue—the remaining 40% is protective apparel. In addition, management noted many products develop through direct communication with end-users—coupled with FDA-approved facilities required to manufacture their products, creates a modest barrier to entry.

Alpha Pro Tech is an intelligent deep value investment in the tradition of Ben Graham. It has a $50 million market capitalization with an enterprise value of $36 million. Debt is only a small lease. APT offers a unique investment opportunity - a strong financial position supported by 10 years of FCF profits and selling below its NCAV.

I started an APT position. Although, an expected slowdown in the housing and protective garment industry may depress the stock price. But I will use market weakness to add to my existing position. Investors can expect a generous shareholder yield while holding the stock with a history of aggressive share repurchases. Management recently announced more funds committed to stock buybacks.

Note the sharp increase in sales during 2020,2021 and the reduction in 2022. The increased sales were from their Disposable Protective Apparel products. Now the effects of COVID-19 are normalizing. But government and company requirements may change. In addition to being a cheap BS and high earnings yield stock, the current valuation more than accounts for potential slowdowns. And to repeat, management offers shareholders a satisfactory return through consistent share repurchases.

The table below shows net income for the three- and nine-month periods ending 09/2022 as per their 10-Q. Note the year over year profit contribution decreased from their disposable protective apparel line. Most importantly, the $4.2 million unallocated overhead expense (C-suite) for the nine months ending 09/2022. The annualized unallocated expense of ~$5 million is saved if acquired by a larger entity/competitor such as Lakeland Industries (LAKE). The considerable C-suite savings makes for an even more attractive acquisition candidate.



The table below highlights Alpha Pro Tech as an investable value anomaly from a discounted net assets and earnings perspective. Notice the significant increase in book value and retained earnings per share. These positive results compare even more favorably to the decline in enterprise value per share over the same multiyear periods.  Book value per share increased 110.74% from 12/2018 to MRQ. Retained earnings per share increased 129.75% over the same period. This contrasts with an enterprise value per share declining -69.72% from 12/2018 to the most recent quarter.

Net current assets trade at 75% of enterprise value. Additional value metrics are the low enterprise value to gross profit, tangible book value, earnings before interest and taxes, and revenue. These measures are at or near low historical and relative valuations.


The building supply segment (home repair and construction) faces a challenging macro environment with rising interest rates and a potential 2023 recession.

Labor and material inflation is likely to impact margins.

Personal protective equipment (PPE) may see less demand and increased competition after COVID normalization.

Donna Millar, the deceased co-founder's wife, owns 10.26% of the shares, amounting to 1,284,603.

Years of zero insider buying; CEO Lloyd Hoffman sold most of his shares during the 2020 irrational market price run-up from COVID impact on demand for protective disposable clothing. CEO Lloyd Hoffman sold 1,251,574 shares at $31.65, or $39,608,120, in 2020.

A rising day sales outstanding is indicative of inventory buildup. The average days in inventory were 217 for the trailing twelve months compared to the historical average of 123 days.

Excessive executive compensation for a tiny company. Annual compensation, CEO Lloyd Hoffman 2020 = $1,632,000, 2021 = $1,079,000: Senior VP of Manufacturing = 2020 = $791,826, 2021 = $626,382, CFO = 2020 = $505,250; 2021 = $378,000


Alpha Pro Tech is an intelligent investment in the tradition of Ben Graham. It's cheap on historical FCF earnings, break-up value, reproduction, or sum of its parts. Further, investors get paid to wait with a high historical shareholder yield from share repurchases and increasing BV.

The company continues to create shareholder value with share buybacks.

A stable high free cash flow yield over the prior ten years with the expectation to continue.

Double-digit increases in book value, retained earnings, EBIT, and revenue per share versus a declining enterprise per value share.

A revised government and corporation mask requirement is possible with new variants and diseases. In addition, N95 masks require a more complex FDA-approved process and specialized materials.

Additional product international sales are likely by leveraging its investment in Indian manufacturers.

A company sale to a larger entity is possible. Management has long-term multi-decade service so that senior management may be open to the company sale.

Disclosure: Long APT