A No Brainer Value Investing Pick?

A Pile of Gold or a Value Trap?

Sometimes when you’re scouring through the nooks and crannies of the internet for a potential investment you stumble upon a company that you think has to be a gold mine… at least initially. The Business’s NAV looks great, the stock is trading at a low, and it looks like the company is losing less money every quarter and is on its way to becoming profitable. When you begin to dive into their financials however you begin to get the sense that there’s a lot of potential for the company to diminish their NAV through expensive expansions that would require debt, the issuance of new shares, or shifts in the way their current operations are ran. These shifts could pay off maybe, but looking back it becomes apparent that the business has tried similar changes over the last couple of years and yet their results were always underwhelming.

Perhaps there’s some new management helping to steer the ship. How much can they change the fundamental businesses behind these assets to create shareholder value? Are they trying to do that? These are the questions I had been asking myself as I was reading up on today’s company. I had heard a lot of buzz over the last couple of weeks about them and it seemed like their business set-up was a no brainer value investing pick. This stock had officially caught my eye and over the next couple of days I was a bit back and forth on whether this company would be a good investment or not.