A $144 Million Cash Pile, Trading for Just $18 Million
Some of my best performing stocks have been special situations.
Spin-offs, an internal pricing increase, turnarounds, activism, and regulatory changes.
A new special situation that I am exploring is “delayed financials.”
When a company has issues filing their financials the stock tends to collapse.
Investors have no idea what is going on. They are in the dark. The company goes silent and you have no idea what is going on financially with an enterprise you bought.
In these situations the stock price tends to fall. Trading liquidity dries up as investors run to the exit.
The interesting part about these situations is that it provides a buying opportunity for savvy investors.
That is the type of situation that I am writing about today.
On November 7th, 2024, this company’s long-time auditor was bought out. The company then employed the buying firm as their new auditor.
On December 17th, 2024, the new auditor identified material weakness in the financials.
Since then the company has not filed their annual report of their Q1 financials.
In addition, the stock dropped from $22 dollars per share to a mere $11 dollars and change today.
Now here is where things get really interesting.
The company has a market cap of $162 million. They have cash and investment securities of $144 million and zero debt.
The enterprise value is a mere $18.4 million.
An $18.4 million enterprise value for a company that has generated $113 million of revenues, $15.1 million of operating income and $22.6 million of free cash flow. These financial figures are in the trailing twelve months before financials were delayed.
What is even more interesting is the amount of cash the company has generated since their financials have gotten delayed.
The last time the company reported was Q3 2024.
On Q3 2024 the company had cash and investment securities of $116.5 million.
The company reported a balance sheet for Q1 2025. In the balance sheet they had $144 million of cash and investment securities.
This means they have generated $27.4 million of cash in two quarters.
What is even more interesting, the company owns two different properties.
In aggregate the properties total 352k sf and 100 acres.
One of the properties in Orlando, Florida is likely worth more than the entire enterprise value of the company.
This company is family controlled. But the executive chairman is 94 years old.
And there is a good chance when he passes away the company is sold off.
Or an even better chance that the younger generation who takes over the company, allocates capital in a more prudential fashion, though dividends and buybacks.
Either way.
The stock is dirt cheap. It has sold off. But still generates significant cash flow.
There is a huge margin of safety here and the catalyst is the company getting current on their financials.
And this appears to be happening as they recently hired a new auditor.
Let’s dig in some more.