I don't know how meaningful calculating BV is, with so little reliable data - that's a notorious minefield - I've seen many, many stocks trade below nominal BV, that went bust, and believe me, when you take a look at that BV you discover it was a theoretical construct and accounting creation. Real-life liquidation value is a different matter. The problem for SFE, is that not only is their NAV declining drastically, but you have to account for all the dogs they own that might go belly up. And worse, with the IPO market comatose where are they going to generate $? Clearly they are not doing so from running the businesses! In fact, they are burning cash operationally - nasty situation. And do they even have anything half-way decent to IPO? When you look at the whole issue from the point of view of declining NAV, dogs on life-support and burning cash, with poor IPO properties and a worse IPO market, you can see why looking at P/B might be deceptive. I don't regard SFE as truly "cheap" until about $3. That being said, December will probably be the intermediate low price of SFE. Should have a relief rally in January - selling will stop by then. But then what? If things don't improve, one day you MAY see $3 a share - without any splits. Perhaps in the very long term, it'll be a good investment, but right now, trading is the less risky strategy. Buy in December - try to catch a bottom if you can and are lucky, and sell January.
Morgan |
