Zero Downside

I stumbled up on this idea the other day. It is small, illiquid and cheap as hell. The company has aggressively grown revenues over 25% for the past two years and has a hoard of cash on their balance sheet. Free cash flow is generated every year and the company has returned a large portion of cash in the past. Despite the success, the company is currently trading under the value of their owned inventories on the balance sheet. You get a pile of receivables for free and an enterprise that generates a few million in cash per year.

The management team is getting old and there has been a recent development on the investor outreach side that look promising. In addition, there is potential for growth in the European markets that remain largely untapped.

The stock is dirt cheap, generating cash and has minimal downside. No one on Wall Street is talking about the company. The last writeup I could find on the stock was almost ten years ago — and a lot has changed since then.

The stock is actionable if you have a small enough portfolio and the amplitude to do the research.

Hope you enjoy…