Hi, going to butt in here gang. I am just an ordinary investor trying to apply the things I'm learning from Peter Lynch and Benjamin Graham so bear with me. This is not hype, just trying to explain all I know.
I think I have a cheap Canadian stock that fits your criteria, one everyone is familiar with but which may be worth a second look in the coming weeks: Clearly Canadian, CLV:VSE or CLCDF. Trading at $1.95 Cdn after bouncing off its low of $1.50 (hardly any traded at that level, buying started kicking in at $1.80).
This for me started last week when I noticed a couple of "fundamentals in real life"--evidence that sales of their old and new products might be picking up. Just anecdotes mostly, some from the Net, some from life. "Orbitz" seems like a stupid drink to me, but it may have a good run as the kids have their fun with it. I don't care that much about Orbitz but it does impress me that an alternative beverage company (a growing market) has the ability to come up with a new product that catches on fire if even for a short while. If they did it this time, they can do it again. And there are many untapped international markets.
Checking the balance sheet indicated some confusing contradictions but the company is doing OK for cash and the price/sales ratio is on the very cheap side at just about 0.8. The company has $0.30 per share in cash. There are a few things about the balance sheet which I confess I don't yet understand. These may be some things that are making the co look worse off than it really is. When I look at some of the listed assets, like "long-term investments", "distribution rights", "long-term receivables", and "other assets", they add up to quite a lot: $15 million. Cash is $10 million, A/R $8.9 million, inventories $4.8 million, and so on...long term debt only $1.2 million and a big $4 million in accounts payable. (And I am not counting property, plant & equipment worth $10 million).
I guess long-term investments means equity stakes in other companies. They have yet to pull off any interesting takeovers after their failure to pull off the Sun-Rype deal. I suggest they won't be bothering to attempt any takeovers with the stock languishing at such low prices. They'll need to use Clearly Canadian stock to make acquisitions, which MIGHT mean that we'll see the stock start to go UP soon.
Bottom line is the company is trading below book. Book is $2.00 or so by my count (amateur). And sales are about to surprise people, or at least undergo their normal summer increase. Also the company has cut costs and restructured their distribution. Oh yeah, and issued a whack of new incentive stock options.
Clearly Canadian has been in retrenchment mode over the past couple of years and management is not well liked, pretty common for any stock that goes too high and then comes crashing down. Still it's a lucrative business and expansion may be beginning again.
I'd like your opinion on the chart. It was all bad, of course, until a few days ago.
I am going to continue looking at the stock from a value angle. The key will be a surprise increase in sales, which I think may be coming this summer. |
