A great value-investing website, The Graham Investor, has turned me on to this undervalued microcap, Arctic Cat (ACAT). This stock is trading at half of tangible book value, a seventh of sales, and a eighth of its enterprise value/revenue for the trailing twelve months. It has no long-term debt. Arctic Cat makes snowmobiles, ATVS, related accessories. Like everyone else in this category, they've been losing money. ACAT has responded by cutting jobs.
This is not a great business selling at a bargain price. They are a luxury item in a weak economy. Their international sales have been hit by a resurgent dollar. Still, there's a lot to like here. In addition to the wonderful things I wrote about above, the company is cash flow positive and has $9 of cash/share on the books. Moreover, insiders own more than half the company.
I think the stock is pretty much bottomed and is a double.
1 comment:
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