A company that is selling at 3.8 EV/EBIT, returns 133% of earnings as dividends and that is now selling at liquidation value.

The market prices this company at liquidation value (expecting no future cash flows). Insiders think otherwise and are buying.

This is an amazing company in a “roadkill” industry with a recent major price dislocation. It is currently trading below liquidation value due to regulatory uncertainty in its primary market, temporary production issues, and recently restated financials. Despite these headwinds, the company has no debt, excellent management, high insider ownership, recent insider purchases, and historically has returned all of its earnings back to shareholders as dividends. It is currently selling at 3.8 EV/EBIT. Today’s price offers investors an asymmetric risk/reward profile with tangible downside protection.

“My definition of a special situation is one where a price dislocation has occurred, either at a single company or across an industry, because the market has identified a particular idiosyncratic risk and assigned an uncertainty discount to it… Although markets are generally good at estimating the magnitude of a contingent liability, they are often poor at evaluating outcomes probabilistically. Examples include litigations, regulatory actions, or other events that create the perception of going concern risk.”

-Jamie Mai from Cornwall Capital

Key Figures

(Market data from 3-31-25, Fundamentals data from 10-K)

Market Cap $172mm

Net Cash $110mm

Enterprise Value (EV) $61mm

Tangible Book Value (TBV) $205mm

Estimated Liquidation Value $172mm

EBIT (TTM) $16mm

Free Cash Flow (TTM) $10mm

P/TBV = 0.84

EV/EBIT = 3.8

Shareholder Yield (8-year avg): 133% of net income, all in dividends.

40% insider ownership, with recent insider buying.