Year-End Dumpster Diving--Finally Some Value to be Found?

http://www.thestreet.com/story/12151022/1/dumpster-diving-for-stocks-and-harvesting-losses.html

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%
EV/EBITDA: 9.3
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%
EV/EBITDA: 9.96
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.

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)
ADPT Corp (ADPT)
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)
GTSI Corp. (GTSI)
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 net.net index in the near future, but truth be told, the cupboards are bare in net/net land at this writing.

Premier Exhibitions- The Titanic Saga Continues

http://www.thestreet.com/story/11935894/1/titanic-treasures-keep-value-locked-in.html

Net/Net Horror Stories: Up in Smoke

Net/Nets don't always work out well.......

http://www.thestreet.com/story/11909127/1/fat-tails-fires-and-your-investments.html

A New Net/Net

http://www.thestreet.com/story/11902923/2/slim-pickings-in-deep-value-land.html

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.

http://www.thestreet.com/story/11877557/1/small-tech-bites-may-make-for-tasty-investment.html

Biglari Holdings Update

http://www.thestreet.com/story/11866733/1/fun-and-fireworks-at-annual-meetings.html

A Former Net/Net Comes Alive

Column from theStreet.com that ran last week on our old net/net friend Ingram Micro.

Mark Boyar to Present at 2013 Value Investing Congress

Before we'd ever researched our first net/net, or written our first article on the subject, Mark Boyar had been producing a newsletter devoted to the subject for years. He began compiling it in the 1970's by hand, long before electronic data was available.  Boyar, founder of Boyar Asset Management, and Boyar Research, is a living legend in the net/net  and value investing worlds.  We've had the opportunity to speak with him on several occasions, and, have found him to be an absolute storehouse of knowledge on the subject of value investing. Plus, he's one of the most down to earth people you'll meet in the business

We were pleased to hear very recently that Mark will be speaking at the 8th annual Spring Value Investing Congress in Las Vegas om May 6th and 7th.  This is the premier value investing conference in our book, and one that we've rarely missed.

Register by Feb 18th to save $1700.

Hope to see you in Vegas!

JG Boswell Special Dividend

Lost among all of the "special dividend madness", as companies paid out cash prior to year-end given the uncertainties of where tax rates would end up, JG Boswell was a participant.  Very quietly, par for the course, the company paid out an $8.00  per share special dividend on 12/20.  You would have never known  about it, unless you carefully checked the transaction history in your brokerage account (if that's where your shares are held).   That's $24 in dividends per share for BWEL in 2012.

*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