A Net-Net With a Catalyst

The stock is trading at 0.5x TBV with an 8x P/FCF ratio and a negative EV.

My favourite investor of all time is Walter Schloss.

The guy personified the deep-value approach and demonstrates how any normally intelligent, risk-averse person can succeed in this business.

His game was super simple.

He’d buy stocks trading significantly below liquidation value, and always hold dozens of them, for max downside protection.

He’d then cash out when they rerated back towards liquidation value and recycle the cash into the next one.

He outperformed the market for over 50 years, and became extremely wealthy.

To his mild annoyance, Buffett made him famous by naming him as a super investor in his famous 1984 article.

Ever since, the secret has been out, and normal people, like me, can confidently partake in the investment business, full time.

Today’s stock is a text-book example of a Walter Schloss style set-up.

Here are the ratios:

NCAV Ratio = 0.7

TBV Ratio = 0.5

P/5Y FCF Ratio = 8

The enterprise value is negative, so you get paid to buy the business.

All in all, there is at least 100…