RE:SRHI as an attractive netnet negative enterprise value stocksculpin2 wrote: SRHI as an attractive net net negative enterprise value stock...
*Net net - Yes
*Margin of Safety - Yes - cash & publicly traded securities >mkt price
*Significant Upside - current $1.35 to potential $5+ based on current assets & pricing alone
*Catalyst - Yes - Strategic review, Copper price rising, Significant free cash flow <1yr https://blogs.cfainstitute.org/investor/2013/07/10/returns-on-negative-enterprise-value-stocks-money-for-nothing/ Value investing is about finding and buying a bargain, a dollar selling for 70 cents or less. One of the most tantalizing apparent bargains offered by the stock market is the negative enterprise value (EV) stock: a stock that is trading for less than the net cash on the company’s balance sheet. Buying a negative EV stock seems like a no-lose proposition: Imagine a house selling for $1 million with a safe in the basement that contains $1.2 million in cash. Why would anyone offer up such a deal? If you find one, should you take it, or write it off as too good to be true?
To answer this question, I investigated the performance of all negative EV stocks trading in the United States between 30 March 1972 and 28 September 2012.
The average return across all 26,569 opportunities was 50.4%. That is, if you had diligently watched the market over the last 40 years and invested $1,000 into each negative EV stock each month, your average investment would be worth $1,504 after holding that investment for one year, not including trading costs, taxes, and so on. Not bad!
The China trade deal is not the only catalyts required for healthy copper pricing, but if it happens, many including myself will be adding to SRHI stock at prices much higher than $1.36/share.
Major shareholders, directors, management, friendlies own 31% of outstanding shares.
SRHI is like shooting fish in a barrell folks!