DIYH is looking more & more like a REAL ESTATE play.
FACT..they sold the land & building of 2 previously closed stores for $8.6 million. I am told its reasonable to expect the others are worth similar amounts. I was going to discount it, but considering its been a year I think the increase in valuation means no discounting is needed.
So $4.3 million x 4.75 stores (sold 1/4 of one)= $20.42 million, less about 2 million for the land on 2 of the stores they dont own = $18.42 million in real estate= $2.53 PER SHARE !
Going ahead and figuring 64% on inventory and adding other assets and cash = $17.171 million, deduct ALL liabilities of $16.375 and the excess is $796,500 or 11 cents a share.
So, I just demonstrated how, upon liquidation, there could be $2.64 a share left over.
The thing is, its not going to happen all at once. Instead, I expect more closures as time goes by. But, they should have dept paid off soon and while profitability is not likely, I do believe they can run at cash flow neutral at the very least.
Then there is always the possibility that they could get down to 4-5 stores, and tweak their mix further and make them moderately profitable.
My argument is with the stock at 66 cents, the worst case scenario would yield shareholders a nice return...EVENTUALLY.
The fact that the insiders seem to load up everytime shares become available is also a plus.
Its always possible that they try to take it private at a lowball $1.25 offer or something... in which case we would still make a good return. I would think it would be very difficult to get a fairness opinion anywhere below $2 however. |
