Is Hupsteel a modern day Graham net-net?
Cash and cash equivalents + inventories (discounted) + receivables (discounted) + available-for-sale financial assets (discounted) + investment properties (June 2012 OMV) = $168m
Total liabilities = $8.4m
Liquidation value = $159.6m
Market capitalization = $138m (627,370,610 shares*$0.22)
Why is Hupsteel trading below liquidation value? Logically, why wouldn't a businessman with $138m to spare buy up the company, then liquidate it and be rewarded for $22m for essentially doing nothing? Is the 70 year-old steel business which has spanned 3 generations worth nothing? Will Mr Market re-rate this stock to a price that is fair and reasonable, or at least closer to its NAV of $0.3298?
Cash and cash equivalents + inventories (discounted) + receivables (discounted) + available-for-sale financial assets (discounted) + investment properties (June 2012 OMV) = $168m
Total liabilities = $8.4m
Liquidation value = $159.6m
Market capitalization = $138m (627,370,610 shares*$0.22)
Why is Hupsteel trading below liquidation value? Logically, why wouldn't a businessman with $138m to spare buy up the company, then liquidate it and be rewarded for $22m for essentially doing nothing? Is the 70 year-old steel business which has spanned 3 generations worth nothing? Will Mr Market re-rate this stock to a price that is fair and reasonable, or at least closer to its NAV of $0.3298?