Finding Deep Value in a Strategic Margin Free Fall

Why Strategic Inventory Rotation is the Precursor to an Earnings Renaissance

The discipline of deep value investing often necessitates a departure from the conventional metrics used by algorithmic trading platforms and large-scale institutional managers. In the realm of nano and micro-cap stocks, the most compelling opportunities frequently reside within businesses that appear to be at first glance, extremely distressed.

Today I’m going to be talking about a strategic inventory liquidation that is setting the stage for a huge margins expansion in the not so distant future by dramatically reducing the company’s interest expenses. In the short-term this inventory liquidation has beaten down the company’s margins. In the long-term it will give a huge boost to them. By getting rid of the company’s interest bearing inventory, its setting itself up for a total margins reset and a return to profitability.