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Stocks Trading Below Net Cash: Adaptec Inc (ADPT), AuthenTec Inc (AUTH) and Cutera Inc (CUTR).

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Cam Hui

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Rating: 3.0/5 (2 votes)

Comments

WideMoat
WideMoat - 6 years ago
Thanks for these ideas.

Pabrai is also seeing value in ZINC at these levels. Horsehead does have some of their future zinc sales hedged, but it remains to be seen where these metals bottom in this cycle, and for how long.

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cm1750
Cm1750 premium member - 6 years ago
I have done a lot of work on ZINC - if Zn prices go back below $0.60, there is not a lot of upside.

However, if you think global growth will come back and Zn reaches $0.80, ZINC could see $11-12 as they are moving all their production to low-cost recycled EAF dust and can sell the iron byproduct for a pretty nice price ($100/ton).

Historically, Zn has averaged $0.50 over the past 10-20 years (pre-global boom).

Pabrai probably see the assets being worth $500MM and the large cash balances as a floor. However, at under $0.60 for Zn, noone would want to pay much for the PP&E as the FCF generation on these assets is just not there. Also, the cash is being largely used for the new EAFD plant expansion.

DaveinHackensack
DaveinHackensack - 6 years ago
"Even if I threw out the microcaps (market cap below $100 million)..."

Why would you want to throw them out? Because they're not as safe as blue chips like AIG, C, or BAC?

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