RE:a question for lifeisgood1010 ? There is a big difference between a great company and a great investment. It can be the best company in the world (with a terrific sustaining competitive advantage), but a bad stock. It all depends how much you pay for that great company.
I do not see Akita as a trading stock. But, if you are going to trade it, this does seem like a great entry point, at $1.35/share. Akita’s tangible book value is $6.73/share (May 29, 2024 post) which does not even include the deferred tax asset of $1.91/share related to loss carry forwards (from Jul 17, 2024 post), making the actual tangible book value $8.64/share. Therefore, Akita is really trading at an unheard of 15.6% ($1.35/$8.64) of tangible book value.
Akita’s net debt is $57M. This should be below management’s $50M target this quarter or next at which time there will be a share buyback and/or a dividend reinstated. Akita’s free cash flow (ie. FCF) for 2023 was about the $24 million that it paid down on its’ net debt. If Akita was running 11 rigs in Canada and 12 rigs in the U.S. (as they are expected to beginning in August’2024) then FCF would be $39M (Jun 24, 2024 post).
The current Akita market cap is $54M. Therefore, if Akita was to pay all of the yearly FCF in a share buyback, Akita would be able to buyback all their shares in 1.8 ($54M/$30M) years at a very conservative $30M FCF. Instead, Akita could pay a $0.75/share ($30M/40M shares) dividend, which works out to a 56% ($30M/$54M FMV) dividend payout yield every year if FCF was all allocated 100% to dividends. This means that at the current Akita price of $1.35, your shares would be fully paid back in dividends in 1.8 ($1.35/$0.75 per year) years. So the stock market could be closed for years and shareholders would still make over 50% per year from $30M per year in dividends.