Thursday, March 27, 2014

Scheid Vineyards in the Spotlight, and You'll Never Guess Who They've Teamed up With

High quality pink sheet wine company Scheid Vineyards (SVIN) has fallen off investors' radar since the company went "dark" in 2006, allowing it to remain publicly traded, while avoiding the prohibitive costs of Sarbanes Oxley, and no longer having to file with the SEC.

Scheid has long been fascinating to this site, primarily due to the companies exposure to the wine industry and ownership of  vineyard acres in California. As of late 2013, Scheid owned 1575 acres, which is nearly 2.5 square miles, and leased an additional 1775.

With just 882,000 shares outstanding following a 1 for 4 reverse split in 2006, shares are difficult to come by, and average volume is just 220 shares per day. Data is also difficult to find since SEC filing is not required.

After years of admiring Scheid from a distance, and seeing shares-which traded for $56 (post-split) in 1998, and $39 in 2008- fall all the way to $8 in 2011, I finally took my initial position. I added more in the mid teens. Now trading at $27, the company is starting to get re-discovered.

Some of the attention is due to the recent partnership the company has entered into with none other than Kathy Lee Gifford, and the new Gifft by Kathie Lee Gifford line of wines. She hawked the new venture earlier this week on Late Night with Seth Meyers. Yesterdays volume of 4000 gave a hint that something was happening.

That was certainly a surprise, and should be a positive for the company. As an investor, however, Scheid remains compelling for other reasons, for one the fact the company is trading at just .59 times tangible book value for share, and owns some high quality assets. Scheid Vineyards is also profitable again. Last year, the company earned $8.01 million (which included a $5.8 million gain on the sale of land) on revenue of $36.3 million.

With such a small float, due in part to the Scheid family's ownership interest in the company, the bid/ask spread is usually very wide.

But it's nice to see the company in the news.

Scheid Vineyards
Ticker: SVIN
Shares Outstanding:
Class A: 734,917
Class B: 147460
Price: $27.00
Book Value Per Share: $45.7
2013 Revenue:$36.3 million (year ended 2/28/2013)
Market Cap: $23.8 million (as of 3/26/2014)
Enterprise Value: $81.7 million (cash/debt based on YE 2013 data):
*Data From 2013 annual report

*The author has a position in Scheid Vineyards). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only                                                                                                                          

The Super Six Anti Value Portfolio-

Unveiled this portfolio of what I believe to be six overvalued companies back in December.

Friday, November 15, 2013

JG Boswell 2013 Fundamental Data

Thanks to the addition of the most recently available year-end data, we've now strung together eleven years worth of fundamentals for JG Boswell. Below are some of the highlight for 2013:

Current Data (2013 Annual)
Current Price: $880
EPS (Fully Diluted): $47.89
P/E: 18
Price/Sales: 1.35
Price/Book: 1.5
Revenue: $646.2 million 
Net Income: $48.25 million
Net Profit Margin: 7.47%
Indicated Dividend Yield:1.85%
Current Market Cap: $886 million
Current Enterprise Value: $1.025 billion
Cash: $1.9 million

10 Year Averages Based on Annual Data:
P/E: 26
Price/Sales: 1.62
Price/Book Value: 1.46
Net Profit Margin: 8.07%
Dividend Yield: 2.1%
Market Cap: $686 million
Enterprise Value: $827 million

*The author has a position in JG Boswell (BWEL). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.

Friday, September 13, 2013

Winding Down The Cheap Stocks 26 Net/Net Index

Today marks the 2nd anniversary of our launch of the Cheap Stocks 26 Net/Net Index, our second experiment in net/net indexing.  The idea was to develop an equal-weighted index of net/nets, and see how it performed over a two year period. We used a "set it and forget it" mentality, and did not drop companies from the index once they no longer traded below net current asset value. Companies that were acquired for cash were not replaced in the index, and the associated cash was included as such once a transaction occurred. For mergers/stock deals, we kept the new entity in the index.

This time around, CS26 returned 41.8% over the past two years, beating the Russel Microcap Index, which was up 29.4%.  However, unlike our last net/net index, it underperformed the S&P 500, which was up 44.8%. Our previous Index beat the S&P by more than 2500bps.

Below are the original members of the CS 26 Net/Net Index:

Ingram Micro (IM)
Benchmark Electronics(BHE)
Imation Corp.(IMN)
RealNetworks, Inc.(RNWKD)
ModusLink Global Solutions(MLNK) 
Tuesday Morning Corporation (TUES)
Maxygen, Inc.(MAXY)
Volt Information Sciences, Inc (VISI)
Axcelis Technologies, Inc. (ACLS)
Kimball International (KBALB)
Opnext, Inc. (OPXT)
Advanced Battery Technologies,(ABAT)
BigBand Networks, Inc. (BBND)
Myrexis, Inc.(MYRX)
Gencor Industries, Inc. (GENC)
Parlux Fragrances, Inc. (PARL)
Trans World Entertainment Corp (TWMC)
Heelys, Inc. (HLYS)
RCM Technologies, Inc. (RCMT)
Trimeris, Inc. (TRMS)
Emerson Radio Corp (MSN)
Adams Golf, Inc. (ADGF)
Planar Systems, Inc. (PLNR)
Books-A-Million, Inc.(BAMM)

Still, it was another interesting experiment, and not surprisingly, the index ended with fewer companies than it started with due to buyouts. It also ended up with some new names due to takeovers:

*In April, 2012, Parlux merged with Perfumania (Perfumania remained in the Index)
*In October 2011, BigBand Networks  was acquired Arris for $2.24/share
*In March, 2012, Adams Golf was acquired by TaylorMade for $10.80/share
*In July, 2012 Opnext and Oclaro merged (Oclaro remained in the index)
*In November, 2011, Trimeris was acquired by Synageva in an all stock deal (Synageva stayed in the index)
*In October, 2011, ADPT changed name to Steel Excel

The biggest winner by far was Synageva (Trimeris) which was up 462%. Absent that one name, performance would have been much worse.  That being said, this go-around of net/net indexing was inconclusive in terms of the success of the concept.

Other winners include Tuesday Morning (TUES, +244%), Trans World Entertainment (TWMC, +149%), Emerson Radio (GTSI, +72%), Benchmark Electronics (BHE, +72%), Kimball Intl (KBALB, +108%), and Axcelis Technolgies (ACLS, +60%).

The biggest losers included Advanced Battery Tech (ABAT, -83%), Myrexis (MYRX, -97%) and Imation (IMN, -42%)..

We'll construct a new index in the near future, but truth be told, the cupboards are bare in net/net land at this writing.

Wednesday, April 03, 2013

Introducing BITES

An index comprised of 5 seemingly cheap and small tech related names. currently trading at an average of 1.27 times net current asset value.