Boole Microcap Fund - Page 14 of 18 - Quantitative Deep Value Investing

This week, we are going to look at DHI Group, Inc. (DHX). DHI Group is the parent company of three internet job sites: Dice, ClearanceJobs, and eFinancialCareers. Dice focuses on technology and engineering jobs, eFinancialCareers focuses on jobs in financial services, and ClearanceJobs focuses on jobs for security-cleared professionals. Art Zeile became CEO in April 2018 and he is leading a turnaround effort.

DHI Group has a market cap of $102.3 million, with $26.8 million in cash and $54.2 million in debt. The stock price is $1.95.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for DHI Group:

- EV/EBITDA = 3.24
- P/E = 3.98
- P/B = 0.76
- P/CF = 3.27
- P/S = 0.68

(Normalized EBITDA is $40 million, normalized earnings is $27.5 million, normalized operating cash flow is $31.3 million, and normalized revenue is $150 million.)

Step Two

Next we calculate the Piotroski F-Score, which is a measure of the fundamental strength of the company. For more on the Piostroski F-Score, see my blog post here: https://boolefund.com/piotroski-f-score/

DHI Group has a Piotroski F-Score of 5. (The best score possible is 9, while the worst score is 0.) This is mediocre, but not bad.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). DHI Group has TL/TA of 50.6%, which is decent.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At DHI Group, insider ownership is about 10%, which is good.

Shareholder yield is the dividend yield plus the buyback yield. At DHI Group, the dividend yield is zero while the buyback yield is 5.87%. So the shareholder yield is 5.87%.

Each component of the ranking has a different weight. The overall combined ranking of DHI Group places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

The final step is to study the company’s financial statements, presentations, and quarterly conference calls to (i) check for non-recurring items, hidden liabilities, and bad accounting; (ii) estimate intrinsic value–how much the business is worth–using scenarios for low, mid, and high cases.

See DHI Group’s most recent quarterly report: https://s24.q4cdn.com/133441296/files/doc_financials/2020/q3/DHX-10Q-2020-Q3.pdf

Also, check out the following write-up: https://valueinvestorsclub.com/idea/DHI_GROUP_INC/0739941408

(To access the link tovalueinvestorsclub.com, you may have to create a guest membership, which is free.)

Intrinsic value scenarios:

- Low case: Book value per share is $2.58 a share. This is over 30% higher than today’s $1.95.
- Mid case: Normalized EBITDA is approximately $40 million. With an EV/EBITDA of 8, the stock would be worth $5.58, which is over 185% higher than today’s $1.95.
- High case: EBITDA may reach $45 million and keep growing at mid single digits. With an EV/EBITDA of 9, the stock would be worth $7.20, which is about 270% higher than today’s $1.95.

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

Saga Communications Inc. (SGA)

November 22, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Northwest Pipe Co. (NWPX): https://boolefund.com/northwest-pipe-co-nwpx/

Smart Sand Inc. (SND): https://boolefund.com/smart-sand-inc-snd/

Terravest Industries Inc. (TVK.TO): https://boolefund.com/terravest-industries-inc-tvk/

LGL Group, Inc. (LGL): https://boolefund.com/lgl-group-inc-lgl/

G-III Apparel Group, Ltd. (GIII): https://boolefund.com/g-iii-apparel-group-ltd-giii/

Hummingbird Resources Plc. (HUMRF): https://boolefund.com/hummingbird-resources-plc-humrf/

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Saga Communications Inc. (SGA). Saga Communications is a radio broadcaster.

The company has a market cap of $127.6 million, with $48.3 million in cash and $16.6 million in debt. The stock price is $21.48.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Saga Communications:

- EV/EBITDA = 3.57
- P/E = 8.50
- P/B = 0.68
- P/CF = 5.10
- P/S = 1.06

Step Two

Saga Communications has a Piotroski F-Score of 6. (The best score possible is 9, while the worst score is 0.) This is decent.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). Saga Communications has TL/TA of 22.6%, which is very good.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At Saga Communications, there are 954,000 class B shares and 5.039 million class A shares. The CEO, Ed Christian, owns all of the class B shares, which means insider ownership is just over 15%. Each class B share is worth ten class A shares when it comes to voting, giving Christian full control of the company. Christian has a good long-term track record of building value.

Shareholder yield is the dividend yield plus the buyback yield. At Saga Communications, the dividend yield is 2.05% while the buyback yield is 0.5%. So the shareholder yield is 2.55%.

Each component of the ranking has a different weight. The overall combined ranking of Saga Communications places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See Saga Communications’ most recent quarterly report: http://d18rn0p25nwr6d.cloudfront.net/CIK-0000886136/1de3a355-3fb9-46c9-82c7-54b7f1dfafd0.pdf

Also, check out the following write-up: https://valueinvestorsclub.com/idea/SAGA_COMMUNICATIONS__-CL_A/2363353097

(To access the link tovalueinvestorsclub.com, you may have to create a guest membership, which is free.)

Intrinsic value scenarios:

- Low case: Book value per share is $31.70 a share. This is over 45% higher than today’s $21.48.
- Mid case: Normalized EBITDA is approximately $32 million. With an EV/EBITDA of 8, the stock would be worth $49.55, which is 130% higher than today’s $21.48.
- High case: EBITDA may reach $35 million. With an EV/EBITDA of 10, the stock would be worth $65.38, which is over 200% higher than today’s $21.48.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Northwest Pipe Co. (NWPX)

November 15, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Smart Sand Inc. (SND): https://boolefund.com/smart-sand-inc-snd/

Terravest Industries Inc. (TVK.TO): https://boolefund.com/terravest-industries-inc-tvk/

LGL Group, Inc. (LGL): https://boolefund.com/lgl-group-inc-lgl/

G-III Apparel Group, Ltd. (GIII): https://boolefund.com/g-iii-apparel-group-ltd-giii/

Hummingbird Resources Plc. (HUMRF): https://boolefund.com/hummingbird-resources-plc-humrf/

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Northwest Pipe Company (NWPX). Northwest Pipe Co. is the nation’s leading manufacturer of engineered water pipeline and infrastructure.

Northwest Pipe has a market cap of $273 million, with $30.4 million in cash and $46.5 million in debt. The stock price is $27.82.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Northwest Pipe:

- EV/EBITDA = 6.67
- P/E = 10.56
- P/B = 1.03
- P/CF = 4.20
- P/S = 0.95

Step Two

Northwest Pipe has a Piotroski F-Score of 6. (The best score possible is 9, while the worst score is 0.) This is decent.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). Northwest Pipe has TL/TA of 28.1%, which is quite good.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At Northwest Pipe, management owns about 3% of the shares, worth over $8 million. This is good.

Shareholder yield is the dividend yield plus the buyback yield. At Northwest Pipe, both the dividend yield and the buyback yield are zero. So the shareholder yield is zero.

Each component of the ranking has a different weight. The overall combined ranking of Northwest Pipe places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See Northwest Pipe’s investor presentation from August 2020: file:///C:/Users/jb/Downloads/NWPX%20Investor%20Presentation%20(August%202020)_vFINAL.PDF

Also, check out the following write-up: https://valueinvestorsclub.com/idea/NORTHWEST_PIPE_CO/6479075476

(To access the link tovalueinvestorsclub.com, you may have to create a guest membership, which is free.)

Intrinsic value scenarios:

- Low case: Book value per share is $26.89. This is 3.3% lower than today’s $27.82.
- Mid case: Normalized earnings are approximately $3.30 per share. With a P/E of 12, the stock would be worth $39.60, over 40% higher than today’s $27.82.
- High case: Normalized earnings could reach $4.00 per share. With a P/E of 15, the stock would be worth $60, about 115% higher than today’s $27.82.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Smart Sand Inc. (SND)

November 8, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Terravest Industries Inc. (TVK.TO): https://boolefund.com/terravest-industries-inc-tvk/

LGL Group, Inc. (LGL): https://boolefund.com/lgl-group-inc-lgl/

G-III Apparel Group, Ltd. (GIII): https://boolefund.com/g-iii-apparel-group-ltd-giii/

Hummingbird Resources Plc. (HUMRF): https://boolefund.com/hummingbird-resources-plc-humrf/

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Smart Sand Inc. (SND). Smart Sand is a low-cost producer of high-quality Northern White raw frac sand (NWS). Raw frac sand is used as a proppant to keep a hydraulic fracture open, allowing the release and capture of hydrocarbons.

The company has one producing mine in Oakdale, Wisconsin, next to the Canadian Pacific railroad, which allows Smart Sand to deliver its Northern White Sand to any shale producer in North America.

Smart Sand has a market cap of $62 million, with $11 million in cash and $63.6 million in debt. The stock price is $1.50.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Smart Sand:

- EV/EBITDA = 1.89
- P/E = 3.19
- P/B = 0.24
- P/CF = 2.33
- P/S = 0.29

Step Two

Smart Sand has a Piotroski F-Score of 7. (The best score possible is 9, while the worst score is 0.) This is good.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). Smart Sand has TL/TA of 33.4%, which is good.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At Smart Sand, the CEO Charles E. Young owns over 15% of the shares, while officers and directors own about 8%.

Shareholder yield is the dividend yield plus the buyback yield. At Smart Sand, both the dividend yield and the buyback yield are zero. So the shareholder yield is zero.

Each component of the ranking has a different weight. The overall combined ranking of Smart Sand places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See Smart Sand’s investor presentation from September 2020: https://ir.smartsand.com/static-files/6e42337b-21da-4e7c-88fa-cfcdc0efe669

Intrinsic value scenarios:

- Low case: EBITDA may fall to $20 million. With an EV/EBITDA multiple of 4x, the stock would be worth $0.97 a share, which is 35.6% lower than today’s $1.50.
- Mid case: The stock is probably worth at least book value, which is $7.04 a share. That’s about 370% higher than today’s $1.50.
- High case: EBITDA is likely to reach at least $100 million if the market recovers in the next few years. With an EV/EBITDA multiple of 5x, the stock would be worth $11.14 a share, which is over 640% higher than today’s $1.50.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Terravest Industries Inc. (TVK.TO)

October 25, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

LGL Group, Inc. (LGL): https://boolefund.com/lgl-group-inc-lgl/

G-III Apparel Group, Ltd. (GIII): https://boolefund.com/g-iii-apparel-group-ltd-giii/

Hummingbird Resources Plc. (HUMRF): https://boolefund.com/hummingbird-resources-plc-humrf/

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Terravest Industries Inc. (TVK.TO). Terravest is #1 in North America at selling home heating oil products (mostly storage tanks). They also sell transport vehicles and storage vessels for propane, anhydrous ammonia, and NGL (they’re #1 in Canada and in the top three in the U.S.). And the company sells oil and gas wellhead processing equipment (they’re #1 in Canada).

Terravest has a market cap of $261.5 million, with $17.3 million in cash and $141.6 million in debt. The stock price is $14.00. (All amounts are in Canadian dollars.)

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Terravest Industries:

- EV/EBITDA = 7.67
- P/E = 11.89
- P/B = 2.39
- P/CF = 4.32
- P/S = 0.83

Step Two

Terravest has a Piotroski F-Score of 7. (The best score possible is 9, while the worst score is 0.) This is good.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). Terravest has TL/TA of 56.7%, which is OK.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At Terravest, insider ownership is approximately 50%. This is excellent.

Shareholder yield is the dividend yield plus the buyback yield. At Terravest Industries, dividend yield is 2.8%. The buyback yield is 6.5%. Thus, shareholder yield is 9.3%. This is very good.

Each component of the ranking has a different weight. The overall combined ranking of Terravest places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See Terravest’s most recent reports: https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00033827

Also, check out the following write-up: https://valueinvestorsclub.com/idea/TERRAVEST_INDUSTRIES_INC/6083042253

(To access the link tovalueinvestorsclub.com, you may have to create a guest membership, which is free.)

Important Note: Terravest Industries is being run by value investors who are focused on maximizing the intrinsic value of the company over time.

Intrinsic value scenarios:

- Low case: Trailing EPS (earnings per share) is $1.18. At a P/E of 10, the shares would be worth $11.77, which is about 16% lower than today’s $14.00.
- Mid case: EPS is likely to reach at least $2.50 in a few years. (EPS grew at 60% a year from 2010 to 2019. EPS won’t grow as fast going forward, but it will still grow.) With a P/E of 14, Terravest would be worth $35 a share, which is about 150% higher than today’s $14.00.
- High case: EPS may reach at least $4.00 in three to five years. With a P/E of 15, Terravest would be worth $60 a share, which is over 325% higher than today’s $14.00.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

LGL Group, Inc. (LGL)

October 25, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

G-III Apparel Group, Ltd. (GIII): https://boolefund.com/g-iii-apparel-group-ltd-giii/

Hummingbird Resources Plc. (HUMRF): https://boolefund.com/hummingbird-resources-plc-humrf/

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at LGL Group, Inc. (LGL). The company designs and manufactures customized electronic components used mainly to control the frequency or timing of electronic signals in communications systems.

LGL has a market cap of $47.7 million, with $22.2 million in cash and no debt as of June 30, 2020. The stock price is $9.15.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for LGL Group:

- EV/EBITDA = 7.30
- P/E = 7.89
- P/B = 1.23
- P/CF = 12.55
- P/S = 1.44

Step Two

LGL Group has a Piotroski F-Score of 6. (The best score possible is 9, while the worst score is 0.) This is OK.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). LGL has TL/TA of 9.4%, which is excellent.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At LGL Group, insider ownership is approximately 3.5%. This is OK.

Shareholder yield is the dividend yield plus the buyback yield. At LGL, dividend yield is zero. The buyback yield is zero. Thus, shareholder yield is zero.

Each component of the ranking has a different weight. The overall combined ranking of LGL places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See LGL Group’s most recent quarterly report (filed August 2020): http://filings.irdirect.net/data/61004/000156459020039680/lgl-10q_20200630.pdf

Also, check out the following write-up: https://valueinvestorsclub.com/idea/LGL_GROUP_INC/9363632622#description

(To access the link tovalueinvestorsclub.com, you may have to create a guest membership, which is free.)

Important Note: The highly successful value investors Mario Gabelli and Marc Gabelli are significant shareholders of LGL. Marc Gabelli is on the board of directors of LGL. The current CEO of LGL, Ivan Arteaga, is also a very successful value investor who previously worked for GAMCO Investors, Inc., which is Mario Gabelli’s investment management firm.

Intrinsic value scenarios:

- Low case: The company may be worth book value, which is $7.42 per share. That’s 19% lower than today’s stock price of $9.15 a share.
- Mid case: EPS (earnings per share) is likely to reach at least $1.50 once the global economy returns to normal (which is likely to happen within the next year or less). With a P/E of 14, LGL would be worth $21 a share, which is about 130% higher than today’s $9.15.
- High case: EPS (earnings per share) may reach at least $2.00 once the global economy returns to normal. With a P/E of 16, LGL would be worth $32 a share, which is about 250% higher than today’s $9.15.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

G-III Apparel Group, Ltd. (GIII)

October 18, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Hummingbird Resources Plc. (HUMRF): https://boolefund.com/hummingbird-resources-plc-humrf/

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at G-III Apparel Group, Ltd. (GIII). Here’s a description of GIII from its most recent quarterly report (September 2020):

“The Company designs, sources, and markets an extensive range of apparel, including outerwear, dresses, sportswear, swimwear, women’s suits, and women’s performance wear, as well as women’s handbags, footwear, small leather goods, cold weather accessories, and luggage. The Company also operates retail stores and licenses its proprietary brands for several product categories.”

GIII has a market cap of $673 million, with $252.8 million in cash and $640.7 million in debt (including operating leases) as of July 31, 2020. The stock price is $13.96.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for G-III Apparel Group:

- EV/EBITDA =3.29
- P/E = 10.17
- P/B = 0.55
- P/CF = 1.68
- P/S = 0.26

Step Two

G-III Apparel Group has a Piotroski F-Score of 6. (The best score possible is 9, while the worst score is 0.) This is OK.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). GIII has TL/TA of 45.5%, which is decent.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At G-III Apparel Group, insider ownership is approximately 11%. (The CEO Morris Goldfarb owns 8.7%.) This is good.

Shareholder yield is the dividend yield plus the buyback yield. At GIII, dividend yield is zero. The buyback yield is 2%. Thus, shareholder yield is 2%.

Each component of the ranking has a different weight. The overall combined ranking of GIII places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See G-III Apparel Group’s most recent quarterly report (September 2020): http://ir.g-iii.com/static-files/fa86b53f-b15e-4e28-a8ce-498f1b5aa49d

Also, check out the following write-up: https://valueinvestorsclub.com/idea/G-III_APPAREL_GROUP_LTD/8646711273#description

(To access the link tovalueinvestorsclub.com, you may have to create a guest membership, which is free.)

Intrinsic value scenarios:

- Low case: EPS (earnings per share) may be $1.00. With a P/E of 10, the company would be worth $10 a share, which is 28% lower than today’s $13.96.
- Mid case: EPS (earnings per share) is likely to reach at least $4.00 once the global economy returns to normal (which is likely to happen within the next year or less). With a P/E of 14, GIII would be worth $56 a share, which is over 300% higher than today’s $13.96.
- High case: EPS (earnings per share) may reach at least $5.00 once the global economy returns to normal. With a P/E of 16, GIII would be worth $80 a share, which is over 435% higher than today’s $13.96.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Hummingbird Resources Plc. (HUMRF)

October 11, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Micropac Industries, Inc. (MPAD): https://boolefund.com/micropac-industries-inc-mpad/

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Hummingbird Resources Plc. (OTCMKTS: HUMRF). The company is an African gold producer, headquartered in London. It has a market cap of US$177.5 million, with US$6 million in cash and US$26 million in debt as of June 30, 2020. The stock price is US$0.50 (HUMRF).

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Hummingbird Resources:

- EV/EBITDA = 2.70
- P/E = 6.16
- P/NAV = 0.51
- P/CF = 3.20
- P/S = 1.03

(I have used P/NAV, price-to-net asset value, instead of P/B, because it’s more accurate in this case.)

Step Two

Hummingbird Resources has a Piotroski F-Score of 7. (The best score possible is 9, while the worst score is 0.) This is good.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). HUMRF has TL/TA of 30.4%, which is very good.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At Hummingbird Resources, insider ownership is approximately 3%. This is decent.

Shareholder yield is the dividend yield plus the buyback yield. At Hummingbird Resources, dividend yield is zero. The buyback yield is 1%. Thus, shareholder yield is 1%.

Each component of the ranking has a different weight. The overall combined ranking of HUMRF places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See Hummingbird Resources’ most recent investor presentation (September 2020): https://wp-hummingbirdresources-2020.s3.eu-west-2.amazonaws.com/media/2020/09/11091214/HUM-Q2-presentation-v2-CURRENT.pdf

Intrinsic value scenarios:

- Low case: NAV (net asset value) per share is $0.98. The company is probably worth at least half NAV. That’s $0.49, which is 2% lower than today’s $0.50.
- Mid case: If production grows as planned, Hummingbird Resources is probably worth least 150% of current NAV. That’s $1.47 per share, which is over 190% higher than today’s $0.50.
- High case: If gold prices move higher and production grows as planned, then EBITDA could double from $73 million to $146 million. EV/EBITDA for HUMRF should be at least 6x. That means the stock would be worth $2.42 per share, which is over 380% higher than today’s $0.50.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Micropac Industries, Inc. (MPAD)

October 4, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Barrett Business Services, Inc. (BBSI): https://boolefund.com/barrett-business-services-inc-bbsi/

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Micropac Industries, Inc. (MPAD). The company distributes microelectronic circuits and electronic components for military, space, and industrial applications. MPAD has a market cap of $29.7 million, with $15.3 million in cash and no debt.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Micropac Industries:

- EV/EBITDA = 2.97
- P/E = 7.72
- P/B = 1.02
- P/CF = 15.28
- P/S = 1.12

EPS (earnings per share) for the trailing twelve months is $1.49, while the current stock price is $11.50.

Step Two

Micropac Industries has a Piotroski F-Score of 7. (The best score possible is 9, while the worst score is 0.) This is good.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). MPAD has TL/TA of 7.5%, which is outstanding. As noted earlier, the company has $15.3 million in cash and no debt.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At Microcap Industries, insider ownership is approximately 82.5%. The interests of insiders are well-aligned with the interests of other shareholders. However, one person, Heinz-Werner Hempel, owns over 77% of the shares. This gives him control of the company, which could be a negative. That said, Hempel is 91 years old and likely will want some liquidity fairly soon, which would lead him to sell some shares.

Shareholder yield is the dividend yield plus the buyback yield. At MPAD, dividend yield is 0.83%. The buyback yield is zero. Thus, shareholder yield is 0.83%, which is negligible.

Each component of the ranking has a different weight. The overall combined ranking of MPAD places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See MPAD’s most recent 10-Q (filed on July 13, 2020) for the second quarter of 2020: https://www.micropac.com/writable/investors/micropac10q05302020.pdf

Also, check out the following discussion, which is dated but still relevant: https://valueinvestorsclub.com/idea/MICROPAC_INDUSTRIES_INC/1629739972

(To access the link to valueinvestorsclub.com, you may have to create a guest membership, which is free.)

Intrinsic value scenarios:

- Low case: The company is probably worth at least book value, which is $11.32 per share. That’s 1.6% lower than today’s $11.50.
- Mid case: EPS for the trailing twelve months is $1.49. The P/E should be at least 8. That translates into a stock price of $11.92. Add to that the $5.89 in net cash per share, and you get a stock price of $17.81, which is about 55% higher than today’s $11.50.
- High case: Once the coronavirus is no longer an issue, normalized EPS may be $2.00 (and slowly growing). MPAD may easily be worth a P/E of 10. That translates into a stock price of $20.00. Add to that the $5.89 in net cash per share, and you get a stock price of $25.89, which is 125% higher than today’s $11.50.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

Barrett Business Services, Inc. (BBSI)

(Image: Zen Buddha Silence, by Marilyn Barbone)

September 27, 2020

We continue with examples of Boole’s quantitative investment process in action.

Recently, we looked at the following companies:

Delta Apparel, Inc. (DLA): https://boolefund.com/delta-apparel-inc-dla/

AdvanSix, Inc. (ASIX): https://boolefund.com/advansix-inc-asix/

Universal Technical Institute (UTI): https://boolefund.com/universal-technical-institute-uti/

Burnham Holdings Inc (BURCA): https://boolefund.com/burnham-holdings-inc-burca/

Select Interior Concepts (SIC): https://boolefund.com/select-interior-concepts-sic/

Manitowoc (MTW): https://boolefund.com/manitowoc-mtw/

Ciner Resources LP (CINR): https://boolefund.com/ciner-resources-lp-cinr/

Global Ship Lease (GSL): https://boolefund.com/global-ship-lease-gsl/

Alico, Inc. (ALCO): https://boolefund.com/alico-inc-alco/

Genco Shipping (GNK): https://boolefund.com/genco-shipping-gnk/

SEACOR Marine (SMHI): https://boolefund.com/seacor-marine-smhi/

Tidewater (TDW): https://boolefund.com/tidewater-tdw/

TravelCenters of America (TA): https://boolefund.com/travelcenters-america-ta/

Teekay Tankers (TNK): https://boolefund.com/teekay-tankers-tnk/

Ranger Energy Services (RNGR): https://boolefund.com/ranger-energy-services-rngr/

Macro Enterprises (Canada: MCR.V): https://boolefund.com/macro-enterprises-mcr-v/

This week, we are going to look at Barrett Business Services, Inc. (BBSI). From the company’s website:

“BBSI is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company’s integrated platform is built upon expertise in payroll processing, employee benefits, workers’ compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI’s partnerships help businesses of all sizes improve the efficiency of their operations. The Company works with more than 6,500 clients across all lines of business in branches across the nation.”

BBSI has a market cap of $378 million, with $130 million in cash and $30 million in debt.

Step One

First we screen for cheapness based on five metrics. Here are the numbers for Barrett Business Services:

- EV/EBITDA = 5.52
- P/E = 8.52
- P/B = 2.09
- P/CF = 7.50
- P/S = 0.41

EPS (earnings per share) for the trailing twelve months is $5.81, while the current stock price is $49.50.

Step Two

BBSI has a Piotroski F-Score of 7. (The best score possible is 9, while the worst score is 0.) This is good.

Step Three

Then we rank the company based on low debt, high insider ownership, and shareholder yield.

We measure debt levels by looking at total liabilities (TL) to total assets (TA). BBSI has TL/TA of 77%, which is decent.

Insider ownership is important because that means that the people running the company have interests that are aligned with the interests of other shareholders. At BBSI, insider ownership is approximately 4.5%. This is OK.

Shareholder yield is the dividend yield plus the buyback yield. At BBSI, dividend yield is 2.45%. The buyback yield is zero. Thus, shareholder yield is 2.45%. (Historically, the company has bought back shares at a rate of about 0.6% a year, and very well may do so again.)

Each component of the ranking has a different weight. The overall combined ranking of BBSI places it in the top 50 stocks on our screen, or the top 2% of the more than two thousand companies we ranked.

Step Four

See BBSI’s investor presentation from November 2020: https://d1io3yog0oux5.cloudfront.net/_f91edf87e792d9795164992068fa7995/bbsi/db/393/3398/pdf/BBSI+Investor+Presentation+-+November+2020.pdf

Also, check out the following: https://valueinvestorsclub.com/idea/BARRETT_BUSINESS_SVCS_INC/4870001850#description

(To access the link to valueinvestorsclub.com, you may have to create a guest membership, which is free.)

Intrinsic value scenarios:

- Low case: EPS (earnings per share) may be $3.70 on the low end, due in large part to the impact of the coronavirus on the U.S. economy. BBSI is currently trading at a P/E of 8.52. Assuming the P/E stays the same, the stock would trade at $31.52. That is 36.3% lower than today’s $49.50.
- Mid case: EPS for the trailing twelve months is $5.81. The P/E should be at least 15. That translates into a stock price of $87.15, which is over 75% higher than today’s $49.50.
- High case: Normalized EPS may be $7.00 (and eventually growing). BBSI may easily be worth a P/E of 20. That translates into a stock price of $140.00, which is over 180% higher than today’s $49.50.

BOOLE MICROCAP FUND

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]