Q: I don't know what to think about this co. Not a lot of shares, real liquidity issue, no insider ownership, no dividend, posted another loss re earnings. Yet full year rev will be quite a large increase and profit expected. Tangible book value is 2x current share price. Why would someone buy, or thesis for buying?
Thanks for your insight.
Thanks for your insight.
5i Research Answer:
Bloomberg shows 60% insider ownership. No analyst coverage, and share liquidity is certainly thin. Many days it doesn't trade at all. The stock has done well: it is up 5X since 2012. Despite losses this year, in some years it makes a lot of money ($295 per share net in 2021, for example). Investors like it at times for its public and (moreso) private investments. We would view it largely as a traded mutual fund, being that it holds a mix of securities. But with weak liquidity and no dividend it is tough to endorse. But, it has been public for more than 30 years so the company sees some benefit (even though it is currently buying back shares).