Thanks to the addition of the most recently available data, we've now reviewed 8 years of data, crunched a lot of numbers for JG Boswell, and have been able to string together eight years worth of fundamentals. Due to the complexity, and growing size of our spreadsheet, we've decided to share just some of the data that will put BWEL's current valuation in perspective.
JG Boswell (BWEL)
8 Year Averages Based on Annual Data:
P/E: 27.3
Price/Sales: 1.56
Price/Book Value: 1.41
Net Profit Margin: 7.49%
EV/EBITDA: 9.71
Dividend Yield: 2.31%
Market Cap: $596 million
Enterprise Value: $718 million
Current Data (2010 Annual)
Price: $699 (11/30 close)
P/E: 22.5
Price/Sales: 1.72
Price/Book Value: 1.48
Net Margin: 7.7%
EV/EBITDA: 10.06
Dividend Yield: 2.0%
Current Market Cap: $692.7 million
Current Enterprise Value: $857 million
We now have compiled 8 years of JG Boswell as-reported fundamental data (balance sheet, Cash Flow, Income Statements, Summary Valuation Data and ratios) in an excel spreadsheet. If you are interested in obtaining this, please contact us at:cheapstocks@verizon.net for pricing.
*The author has a position in JG Boswell(BWEL). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Wednesday, 1 December 2010
Thursday, 18 November 2010
Lazare Kaplan Lives; Still No Balance Sheet, Though
No sooner did we part ways (for the second time) with LKII than the company announced a settlement agreement with ABN AMRO Bank and the Royal Bank of Scotland, which, as we understand it, resulted in $64 million in obligations being deemed "satisfied in full". ABN also agreed to transfer 2,151,103 shares of outstanding LKII stock, more than 25% of outstanding shares, back to the company. Lazare Kaplan forked over $14 million in cash to ABN and RBS as part of the settlement.
Shares jumped on the news, and now "trade" in the $1.41 range. With such a small float, trading volume is extremely light, and the bid ask spread very wide; $1.30/$1.75 at this writing.
Certainly sounds like some positive developments for Lazare, which has suffered in the aftermath of some missing inventory (diamonds), but we still don't know what shape the company is in, and have not seen a balance sheet in ages. We also don't know that status of the company's $640 million lawsuit with it's insurers.
This could get interesting, but there are still many unknowns.
Stay tuned.
*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Shares jumped on the news, and now "trade" in the $1.41 range. With such a small float, trading volume is extremely light, and the bid ask spread very wide; $1.30/$1.75 at this writing.
Certainly sounds like some positive developments for Lazare, which has suffered in the aftermath of some missing inventory (diamonds), but we still don't know what shape the company is in, and have not seen a balance sheet in ages. We also don't know that status of the company's $640 million lawsuit with it's insurers.
This could get interesting, but there are still many unknowns.
Stay tuned.
*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Tuesday, 19 October 2010
Parting Ways with Lazare Kaplan (LKII)
One of the great frustrations with the companies that end up in net/net land, is that you never know what might happen. This comes with the territory. In the case of diamond company Lazare Kaplan, "lost diamonds" led to a 10 month period where shares did not trade. The company was not talking, either. Shareholders were left in limbo with very little information, and no financial statements. The company was suspended from trading, but ultimately listed on the pink sheets, and began "trading" again in July.
We'd all but given up on Lazare; this was the second time we owned it, and thankfully our cost basis this time was $1.18.
But more details of the company's troubles began to emerge over the summer. We've seen some speculation by others that the company's $640 million lawsuit against its insurers, who are refusing to pay claims over the missing diamonds, may end up handsomely rewarding shareholders. We, however, have decided that the risk-reward is not in our favor in this case, and have closed our position.
While a lawsuit victory would be a huge windfall to the company, we believe that the fundamentals continue to deteriorate. The company's most recent 8K suggested that Q1 revenue will be about $33.2 million, down from $74.2 million last year. Meanwhile, we don't know what shape the balance sheet is currently in; it's been ages since we've seen one. In any event, we would rather walk away with $.80 or $.90 per share of our original $1.18 investment than take the chance of total loss.
*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
We'd all but given up on Lazare; this was the second time we owned it, and thankfully our cost basis this time was $1.18.
But more details of the company's troubles began to emerge over the summer. We've seen some speculation by others that the company's $640 million lawsuit against its insurers, who are refusing to pay claims over the missing diamonds, may end up handsomely rewarding shareholders. We, however, have decided that the risk-reward is not in our favor in this case, and have closed our position.
While a lawsuit victory would be a huge windfall to the company, we believe that the fundamentals continue to deteriorate. The company's most recent 8K suggested that Q1 revenue will be about $33.2 million, down from $74.2 million last year. Meanwhile, we don't know what shape the balance sheet is currently in; it's been ages since we've seen one. In any event, we would rather walk away with $.80 or $.90 per share of our original $1.18 investment than take the chance of total loss.
*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Wednesday, 13 October 2010
Value Investing Congress: David Einhorn on St. Joes
Today ended the sixth annual New York Value Investing Congress, and the day's action did not disappoint. Once again, John Schwartz and Whitney Tilson put on a great event.
One of the conferences best presentations was this morning from Greenlight Capital's David Einhorn. A well respected colleague of mine joked just yesterday after seeing the title of Einhorn's presentation (If You Build it They Won't Come), that he hoped that Einhorn was not referring to St. Joes (JOE), a name in which my colleague has a small position. Its also a name that I previously owned, and we previously covered here at Cheap Stocks. In fact, a few years back David Einhorn took exception to some of our comments about JOE, and we invited him to write a response, which we ran unaltered.
Indeed, Einhorn's very detailed, very well delivered presentation was about St. Joe's. He left no stone unturned, and weaved together a very compelling case that JOE is overvalued at current levels. In fact, Einhorn suggested that JOE is worth no more than $7 to $10 to an acquirer now, and perhaps less if the company continues to sell property in order to cover operating expenses.
In a similar style used in his book "Fooling Some of the People All of the Time", Einhorn laid out his case. He used photos, and video of some of the current St. Joes developments, some of which appear to be ghost towns. He also used detailed property sales data, to reach the conclusion that St. Joes should probably be writing down the value of some of it's properties. It was indeed a sobering look of a company that we were bullish on in previous years.
While we never quite reached the same devastating conclusion as Einhorn, our patience did ultimately wear thin, when we realized that the company might have difficulty converting its only assets into cash.
Once again we give Einhorn a great deal of credit. His analysis was incredibly well done, and he's probably one of the brightest guys in the business. Time will tell whether he's nailed the St. Joes story the way he did with Allied Capital in "Fooling Some of the People..."
*The author has no positions in any of the securities mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
One of the conferences best presentations was this morning from Greenlight Capital's David Einhorn. A well respected colleague of mine joked just yesterday after seeing the title of Einhorn's presentation (If You Build it They Won't Come), that he hoped that Einhorn was not referring to St. Joes (JOE), a name in which my colleague has a small position. Its also a name that I previously owned, and we previously covered here at Cheap Stocks. In fact, a few years back David Einhorn took exception to some of our comments about JOE, and we invited him to write a response, which we ran unaltered.
Indeed, Einhorn's very detailed, very well delivered presentation was about St. Joe's. He left no stone unturned, and weaved together a very compelling case that JOE is overvalued at current levels. In fact, Einhorn suggested that JOE is worth no more than $7 to $10 to an acquirer now, and perhaps less if the company continues to sell property in order to cover operating expenses.
In a similar style used in his book "Fooling Some of the People All of the Time", Einhorn laid out his case. He used photos, and video of some of the current St. Joes developments, some of which appear to be ghost towns. He also used detailed property sales data, to reach the conclusion that St. Joes should probably be writing down the value of some of it's properties. It was indeed a sobering look of a company that we were bullish on in previous years.
While we never quite reached the same devastating conclusion as Einhorn, our patience did ultimately wear thin, when we realized that the company might have difficulty converting its only assets into cash.
Once again we give Einhorn a great deal of credit. His analysis was incredibly well done, and he's probably one of the brightest guys in the business. Time will tell whether he's nailed the St. Joes story the way he did with Allied Capital in "Fooling Some of the People..."
*The author has no positions in any of the securities mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Thursday, 7 October 2010
Whatever Became of The Cheap Stocks 21 Net/Net Index?
Although we wrapped up our experimental 2 year index of net/nets last February, we still have the ability to track it. While it ended the 2 year run up 5.1%, nearly 1400 bps points ahead of the Russell Microcap Index, and more than 2500 bps ahead of the S&P 500, we'd actually hoped for better performance.
Although we've generally stopped tracking CS 21 since the intended February wind-down, we thought it would be interesting to check performance since then. Since February, the Index is up 14.3%, vs. 5.13% for the S&P 500, and 12.25% for the Russell Microcap Index. Since orignal inception, CS21 is up 20.45% while the S&P 500 is down 16% and the Russell Microcap is down about 9.8%
The primary determinant of the continued decent run by the index has been the performance of former net/net The Finish Line (FINL) which is up more than 500% since the original index launch.
Please search the site for past posts on CS21. Below are the orignal components, and their initial weights.
Adaptec Inc(ADPT)
Weight: 18.72%
Computer Systems
Audiovox Corp(VOXX)
Weight: 12.20%
Electronics
Trans World Entertainment(TWMC)
Weight:7.58%
Retail-Music and Video
Finish Line Inc(FINL)
Weight:6.30%
Retail-Apparel
Nu Horizons Electronics(NUHC)
Weight:5.76%
Electronics Wholesale
Richardson Electronics(RELL)
Weight:5.09%
Electronics Wholesale
Pomeroy IT Solutions(PMRY)
Weight:4.61%
IT
Acquired
Ditech Networks(DITC)
Weight:4.31%
Parlux Fragrances(PARL)
Weight:3.92%
Personal Products
InFocus Corp(INFS)
Weight:3.81%
Computer Peripherals
Acquired
Renovis Inc(RNVS)
Weight:3.80%
Biotech
Acquired
Leadis Technology Inc(LDIS)
Weight:3.47%
Semiconductor-Integrated Circuits
Replidyne Inc(RDYN)Became Cardiovascular Systems (CSII)
Weight:3.31%
Biotech
Tandy Brands Accessories Inc(TBAC)
Weight:2.94%
Apparel, Footwear, Accessories
FSI International Inc(FSII)
Weight:2.87%
Anadys Pharmaceuticals Inc(ANDS)
Weight:2.49%
Biotech
MediciNova Inc(MNOV)
Weight:2.33%
Biotech
Emerson Radio Corp(MSN)
Weight:1.71%
Electronics
Handleman Co(HDL)
Weight:1.66%
Music- Wholesale
Chromcraft Revington Inc(CRC)
Weight:1.62%
Furniture
Charles & Colvard Ltd(CTHR)
Weight:1.50%
Jewel Wholesale
We still intend on developing a new Net/Net Index, this time equal weighted. Stay Tuned.
*The author has a position in Chromcraft Revington (CRC). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Although we've generally stopped tracking CS 21 since the intended February wind-down, we thought it would be interesting to check performance since then. Since February, the Index is up 14.3%, vs. 5.13% for the S&P 500, and 12.25% for the Russell Microcap Index. Since orignal inception, CS21 is up 20.45% while the S&P 500 is down 16% and the Russell Microcap is down about 9.8%
The primary determinant of the continued decent run by the index has been the performance of former net/net The Finish Line (FINL) which is up more than 500% since the original index launch.
Please search the site for past posts on CS21. Below are the orignal components, and their initial weights.
Adaptec Inc(ADPT)
Weight: 18.72%
Computer Systems
Audiovox Corp(VOXX)
Weight: 12.20%
Electronics
Trans World Entertainment(TWMC)
Weight:7.58%
Retail-Music and Video
Finish Line Inc(FINL)
Weight:6.30%
Retail-Apparel
Nu Horizons Electronics(NUHC)
Weight:5.76%
Electronics Wholesale
Richardson Electronics(RELL)
Weight:5.09%
Electronics Wholesale
Pomeroy IT Solutions(PMRY)
Weight:4.61%
IT
Acquired
Ditech Networks(DITC)
Weight:4.31%
Parlux Fragrances(PARL)
Weight:3.92%
Personal Products
InFocus Corp(INFS)
Weight:3.81%
Computer Peripherals
Acquired
Renovis Inc(RNVS)
Weight:3.80%
Biotech
Acquired
Leadis Technology Inc(LDIS)
Weight:3.47%
Semiconductor-Integrated Circuits
Replidyne Inc(RDYN)Became Cardiovascular Systems (CSII)
Weight:3.31%
Biotech
Tandy Brands Accessories Inc(TBAC)
Weight:2.94%
Apparel, Footwear, Accessories
FSI International Inc(FSII)
Weight:2.87%
Anadys Pharmaceuticals Inc(ANDS)
Weight:2.49%
Biotech
MediciNova Inc(MNOV)
Weight:2.33%
Biotech
Emerson Radio Corp(MSN)
Weight:1.71%
Electronics
Handleman Co(HDL)
Weight:1.66%
Music- Wholesale
Chromcraft Revington Inc(CRC)
Weight:1.62%
Furniture
Charles & Colvard Ltd(CTHR)
Weight:1.50%
Jewel Wholesale
We still intend on developing a new Net/Net Index, this time equal weighted. Stay Tuned.
*The author has a position in Chromcraft Revington (CRC). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Sunday, 19 September 2010
Slim Pickings
There's just not been a great deal to mention these days in the land of the net/nets. That typically happens as a rising tide lifts all boats, even those with a few holes. At recent count, there are just a handful of net/nets with market caps in excess of $100 million.
There are more names in the $10-$100 million range, and among these are a few retailers. As you may recall our February 2010 recap of net/net retailers, there were a dozen retail net/nets in the dog days of early 2009, and the returns the following year were quite good.
While we are not suggeating that the current crop of retail net/nets, which are very few in number, will have the same outcome, we are nonetheless intrigued.
AC Moore
Ticker: ACMR
Price: $1.78
Market Cap: $44.8
NCAV: $62.4
Mkt Cap/NCAV: .72
Cash: $31.4
PE: NA
This 135 store craft retailer has struggled throughout the recession and has not had a profitable year since fiscal 2007. Company has $31.4 million in cash and $19 million in debt. Currently trades at .3 times book value per share.
Duckwall Alco
Ticker: DUCK
Price: $12.99
Market Cap: $49.9
NCAV: $64.7
Mkt Cap/NCAV: .77
Cash: $3.7
PE: NA
Regional retailer has 258 stores in 23 states; tends to be located in towns too small to support a Wal Mart. Currently trades at .48 times book value per share. Two of past five quarters have been profitable. Company is a perennial net/net with no analyst coverage. Has generated more than $3.00 in free cash flow in trailing 12 months. Ended last quarter with $41 million in debt. Currently trades at just over 5 times EV/EBITDA.
*The author has a position in AC Moore. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
There are more names in the $10-$100 million range, and among these are a few retailers. As you may recall our February 2010 recap of net/net retailers, there were a dozen retail net/nets in the dog days of early 2009, and the returns the following year were quite good.
While we are not suggeating that the current crop of retail net/nets, which are very few in number, will have the same outcome, we are nonetheless intrigued.
AC Moore
Ticker: ACMR
Price: $1.78
Market Cap: $44.8
NCAV: $62.4
Mkt Cap/NCAV: .72
Cash: $31.4
PE: NA
This 135 store craft retailer has struggled throughout the recession and has not had a profitable year since fiscal 2007. Company has $31.4 million in cash and $19 million in debt. Currently trades at .3 times book value per share.
Duckwall Alco
Ticker: DUCK
Price: $12.99
Market Cap: $49.9
NCAV: $64.7
Mkt Cap/NCAV: .77
Cash: $3.7
PE: NA
Regional retailer has 258 stores in 23 states; tends to be located in towns too small to support a Wal Mart. Currently trades at .48 times book value per share. Two of past five quarters have been profitable. Company is a perennial net/net with no analyst coverage. Has generated more than $3.00 in free cash flow in trailing 12 months. Ended last quarter with $41 million in debt. Currently trades at just over 5 times EV/EBITDA.
*The author has a position in AC Moore. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
Tuesday, 31 August 2010
Next Value Investing Congress October 12-13 in NYC
I have not missed a session of the Value Investing Congress since my first visit to the VIC West (at that time held in Hollywood and now in Pasadena) back in May of 2007. Its a first class event, and I've never walked away without several actionable ideas.
There have been a few surprises along the way as well. Two years ago at the New York VIC, Carl Icahn gave an unexpected (to me, anyway) presentation.
This is indeed a great opportunity to hear from some of the best value investors of our time, network with other like-minded investors, and rub elbows with value managers.
My friends at the Value Investing Congress have been kind enough to offer Cheap Stocks readers a discount of $1400, the early-bird rate starting today and ending on 9/13. For more information see the ad on our front page.
Hope to see you in NY!
There have been a few surprises along the way as well. Two years ago at the New York VIC, Carl Icahn gave an unexpected (to me, anyway) presentation.
This is indeed a great opportunity to hear from some of the best value investors of our time, network with other like-minded investors, and rub elbows with value managers.
My friends at the Value Investing Congress have been kind enough to offer Cheap Stocks readers a discount of $1400, the early-bird rate starting today and ending on 9/13. For more information see the ad on our front page.
Hope to see you in NY!
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