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Virtus Diversified Income & Convertible Fund V.ACV.P


Primary Symbol: ACV

Virtus Diversified Income & Convertible Fund (the Fund) is a diversified, closed-end management investment company. The Fund's investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of convertible securities, income-producing equity securities and income-producing debt and other instruments of varying maturities, of which at least 50% of total managed assets are invested in convertibles. The Fund has the latitude to write covered call options on the stocks held in the equity portion. The Fund's investment advisor is Virtus Investment Advisers, Inc., and its investment subadvisor is Voya Investment Management Co. LLC.


NYSE:ACV - Post by User

Comment by GreekRocket36on Nov 21, 2019 6:22pm
158 Views
Post# 30380210

RE:RE:RE:RE:RE:writing on the walls

RE:RE:RE:RE:RE:writing on the wallsYou`re right. They got 10m in NWC (inventory, prepaids, receivables - payables) and 18m in debt. If they were to liquidate the business, they would owe a net of 8m. Plus, the company`s market cap is 9.75m, so total EV is 17.75m. On sales of say 50m (I think they would be higher, but lets be conservative and use last quarters sales numbers, and 0.5x revenue multiple, you get 25m, so 8m higher than implied EV or 82% upsideon 9.75m equity. If we`re a bit more aggressive, we can use revenues of 55m and revenue multiple of 0.75x (what they got for Kiju, operating in a far more competitive industry), for EV of 41m, or 23m higher. That represents 138% upside. Use 60m in sales and 1x revenues and you get 330% upside. Also, in private hands, this business can say generate 5-10% EBITDA margin, so even at 5% of 50m, you get 2.5m EBITDA. Put a 20x multiple on it, you`re at 50m EV, or 240% upside. The question is will the CEO swallow his ego and sell the company? He's destroyed a lot of value, I hope the special committ e and board does the right thing... 
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