Investment Q&A

Q: Reko released excellent y/e results yesterday.
The company is now debt free and focused on robotic factory automation & precision machining.
During the past couple years Reko has paid a special dividend and bought back over 5% of their o/s shares while growing their book value to over $8.
Do you feel that the company is undervalued and is a prime candidate for a privatization or take over?

Q: Reko has just announced another profitable quarter. Revenues jumped significantly and outlook appears strong. 

During the quarter, the company re-purchased 35,800 shares under the normal
course issuer bid.

During the previous quarter, the company re-purchased 29,700 shares under the normal course issuer bid.

During the fiscal year ended July 31, 2021, a total of 238,800 shares were purchased and cancelled.

On December 2, 2021, Reko paid out a special cash dividend of $0.25 per share.

The balance sheet is pristine with close to $4 in working capital and a “hard” book value approaching $8(no goodwill on the B/S and real estate at cost).

Would you consider Reko to be a buy at these levels and what would you see as the potential outcome for minority shareholders (family controls 2/3 of the shares).

Q: Reko has just announced its best quarter in almost 5 years. It was driven by increased revenue and improved operational efficiencies.
Reko continues to buy back its shares and has a “hard” book value of $7.74 that is probably understated given the real estate the company owns. The balance sheet is pristine with over $3.35 in working capital. Although the Reko family controls 2/3 of the shares what would you consider a fair value for the shares if it was privatized or as a continuing public company?

Q: Reko just released very good 3rd quarter results. The company has a solid Book Value(no goodwill) at $7.20 with no debt except for mortgage debt on their properties.
They finally showed revenue growth driven by their automation division. They are generating close to $1 per share annually in cash flow. As a microcap investment do you consider this company undervalued with significant upside potential?