A $1.3 Million Company With $1.1 Million in Cash, a 76% Gross Margins, and Zero Debt
Buy a $1 Million Pile of Cash for $254k
The company I’m going to be talking about today is tiny. Their 1.7 million shares are currently selling for $0.75 which gives this business a teeny market cap of just $1.3 million. I don’t often come across companies this small but it wasn’t this company’s miniscule market cap that caught my eye. I almost never come across a company with so many pillars of value. Usually when something looks this good I find out half way through reading their financials why the company is priced so cheaply. This time however, the more I read, the more I liked what I was reading. I think this company might just be a perfect value investment candidate.
This company trades at $0.75 a share but has a NAV of $1.01 per share. This company has no long-term debt. They also have a $1.06 million cash pile. That’s almost the size of their market cap! Due to this low debt and large cash pile they have an astonishingly low $254k enterprise value. When all is said and done you can buy a $1.06 million pile of cash for just $254k!
When a business is trading this cheap it’s usually accompanied by a past full of net losses or at least shrinking margins, not here though. This company is growing its margins not just by lowering their cost of sales but also by lowering their general and administrative expenses, something I rarely see happen nowadays, especially in this post inflationary environment we’re in now. This company’s gross margins currently sit at 76.4% up from 73.6% last year and 71.1% in the company’s fiscal 2023. Any extra revenue this business is able to bring in should drop right down to their bottom line
After a new president and CEO joined the company they’ve finally managed to put some of their cash to work and have experienced a 627% increase in interest income over the past three years, further adding to the company’s profitability. This business makes real tangible products that benefit and actively helps to manufacture the world around us and have recently signed a contract with a huge international distributor that will put the company’s products in front of the eyes of countless businesses operating in the mold making and die casting industries around the world. This business also services a whole array of other industries including the automotive, aerospace, mining, petroleum, shipbuilding, welding, machine tooling, plastic molding, racing, engine building, and armament industries.
The products this company makes benefits manufacturers by saving them time and I mean extensively through processes that don’t require heat to be applied to metal and therefore doesn’t require an extensive cooling period. These products also help the metals they’re used on retain shape because they aren’t exposed to extreme heats which can warp parts. This technology scales too and can handle metals weighing just a few ounces all the way up to products that weigh one million pounds.
This is a small well run company with a new CEO/President and new ideas which could see the company looking at a large runway for growth in the coming years. You don’t often find this many catalysts in one place. The more I looked into this business the more I knew I had to write them up.