A healthy business trading at half net-cash
This net-net trades at 46% of TBV, 1x EV/FCF and 2.1x P/FCF, and is still paying dividends.
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This stock was taken private by the insiders and largest shareholder.
At the time of the announcement it had roughly £12M in net-cash and a 5Y FCF figure of roughly £2M.
This all came from the annual revenues of around £30M.
The enterprise value was -£7M and the market cap was around £3M.
In other words, it was dirt-cheap.
I was aware of the concentrated ownership but decided to buy it simply because of how ridiculous the price was.
I also ensure I never have too many of these set-ups in the group, just in case.
If it goes badly, I might make a few percent or lose a few percent.
If it goes well, I double, triple or quadruple my money within 1-3 years.
This is a classic, text-book scenario in deep-value stocks.
I don’t really comment on the ‘ethical’ side of this type of activity.
I understand what it feels like to have your shares taken away for an absurdly low price. You feel like you’ve been mugged by people in suits.
I also understand how it feels to be able to buy back your entire business with half the cash in the actual business.
It’s almost the ‘rational’ move for anyone in the hot-seat.
Regardless of all that, the lesson here is simple.
Always double check for concentrated ownership, and figure out how they could force an involuntary delisting at a low price.
If it’s feasible, think very carefully before buying the stock.
The lower the stock price falls, the more tempting it will be for the owners and management to just scoop up all the shares and go private.
Whatever you do, don’t fill your portfolio with these scenarios.
I’ve left the original write-up below, in case you find it interesting…
Publish price = £0.12
Take-private price = £0.14
This represents a roughly 17% return in 8 months, which isn’t a disaster.
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Original Analysis posted on the 3rd May 2025:
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Today’s stock is a UK listed business with the following valuation ratios:
NCAV Ratio = 0.52
TBV Ratio = 0.46
EV/FCF Ratio = 1
P/FCF Ratio = 2.1
This is the kind of simple set up that I love.
A business priced as if it will cease to exist tomorrow.
In this case, it’s even better because the valuation is so clear. The business is being priced at over half of the value of its net-cash (after debts).
Here, the market is saying that the value of £1 inside this business is less than £0.50.
Despite the fact that this business has been around for over 100 years and has overcome similarly challenging periods before.
The only question is whether todays price is accurate or a mispricing.
Let’s take a closer look…
Michael Burry (of Big-Short fame) has a saying:
“I try to buy shares of unpopular companies when they look like road kill and sell them when they’ve been polished up a bit”
That sums up Walker Crips (WCW.L) in 2025.
This is a hundred-year-old asset management firm, founded right before the First World War. It’s survived the Blitz, regulatory overhauls, and more financial crises than most funds have quarters of existence.
And today, it trades like it’s already dead and buried.
Walker Crips is dirt cheap by pretty much any metric.
This is a business with virtually no debt, more net-cash than market cap, positive cash flow, and a management team that continues to pay dividends.
So why is it this cheap?
Like most UK small-cap financials, they’ve been crushed by rising regulatory costs and a difficult macro backdrop, higher rates, volatile markets, and declining margins.
Recent profitability has been weak, and the market’s assigning zero credit for a turnaround.
But here's the thing: This is not the first time Walker Crips has looked like a write-off.
Back in the early 2000s, it took a massive bad debt hit and the stock price collapsed.
Management cleaned house, cut costs, restructured their revenue base, and staged a recovery.
This isn’t an unproven business fumbling around. They’ve done it before.
My custom DCF model assumes no growth, static cash flows, and applies a 7% discount rate.
No rosy projections. No terminal value fantasy. Just 10 years of mediocre results and full net cash recovery.
Even then, I calculate a 400% upside from today’s price.
In reality, they don't even need to hit that target. Just survival and modest improvements would drive a re-rating.
Doubling our money on this stock, in my opinion, is quite straightforward.
Brand Value, and Embedded Resilience
What keeps me interested isn’t just the balance sheet.
It’s the intangibles: a recognized brand in the UK financial sector, deep regulatory infrastructure, and existing client relationships.
In other words, a long-standing platform that can scale, or get acquired, once profitability stabilizes.
Yes, there’s some operational deadwood.
Yes, margins have shrunk.
But you’re paying less than liquidation value for a firm that still earns money and returns capital to shareholders.
My Position
I started buying at £0.18. I’m buying more at £0.12.
My position now sits at 5% of my portfolio.
Liquidity is thin, but not an issue for individual investors.
This is a classic deep value set up. No hype, no growth story, no institutional love. Just a net-cash generator trading at distressed levels.
With net cash greater than the entire market cap, positive FCF, and a shareholder-friendly history, the risk/reward is one of the best I’ve seen in the UK microcap space.
I’ll keep adding as long as the market keeps handing out this gift.
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Thanks for the idea. I noticed the below from their annual report "Given the ongoing financial challenges faced by the Group, it became evident that raising sufficient additional share capital from our sponsors or shareholders alone would be insufficient to restore Walker Crips Group to a stable financial footing. We have secured a £5 million loan facility from one of our major shareholders to provide the necessary funding to support our future plans and reinforce the Group’s financial stability. The availability of this loan facility is instrumental; without it, the Group would lack the capacity to implement essential changes and invest in the growth strategies required to move our business forward."
Why do they need this 5m Loan facility while they have ~13m unencumbered cash?
Hello,
I’ve recently become a paid subscriber and would appreciate some clarity regarding stock recommendations. If I choose to buy a stock based on your guidance, will you provide updates on when to exit the position, or is it my responsibility to monitor and manage it independently? While I am new to stock trading, I do have experience in the Forex market and have been following Forex Source (now Financial Source) since 2020.
Given my background, I’d appreciate your guidance on how best to stay informed after entering a trade and whether updates will be provided as part of the service.
Thank you.