Here are a few interesting value investment ideas from the past two weeks:
This is a thoroughly research post from AboveAverageOdds regarding a spin-off business, one of the special situations investment scenarios that has historically provided outstanding returns.
KHDFHF is an industrial business specializing in proprietary technologies for cement and mineral processing.
The company is obscure, and other factors (including only reporting financial results twice a year, located in Germany, etc) might serve to deter investors. Despite the obscurity, the company appears to have a strong competitive position and a solid cash position to take advantage of future growth opportunities.
Furiex Pharma: Spinoff Trading at Net Cash – Continuing the spin-off theme with an analysis of Furiex Pharmaceuticals (FURX) over at OozingAlpha. FURX is a company in the drug discovery business and was recently spun-off from PPDI back in June.
Within weeks of the spin-off, the stock dropped from $18 to below $10, and has traded around there since. Although the stock is currently trading around net cash, the business requires a high rate of cash burn while researching new drugs.
Several promising drugs in the pipeline could lead to future gains.
When All Problems Are Short-Term – Barel Karsan has a post on small-cap infrastructure company called Sterling Construction (STRL). The company is in a very cyclical business, and appears it depends on budgets of state governments (many are struggling with tax & budget issues), resulting in margin pressure and revenue swings.
STRL doesn’t have the typical ‘value-oriented’ balance sheet, but has earnings potential for investors unconcerned with short-term results.
Top Net/Net’s By Market Cap – In the spirit of Graham and other deep value investors, net/net investing has proven profitable over many years. Several recent investments here at Value Uncovered, including CHBU & ELST, were based on this methodology.
Cheap Stocks has a nice list of stocks trading at less then NCAV. Several names on the list, such as VOXX, have been on these lists for awhile, so it is important to find those with some sort of catalyst.
Long CHBU & ELST