Reko International Group Inc. is a “diversified, technology-driven manufacturing company located in Southwestern Ontario, just minutes from the U.S. border. With expertise in robotic automation equipment and precision machining services, Reko is a "go-to" supplier for companies in the automotive, aerospace, rail, power generation and capital equipment industries. Reko strives to be a pillar and protector of sustainable North American manufacturing and production.”
Short notes here are that this is a tiny and illiquid-ly trading company with a very high insider ownership of about 75%. Company is profitable and buying back shares. Earnings are lumpy and have been soft this past quarter but what really intrigued us was the book value. At Friday’s close of $4.88 the company has a market cap of roughly $28 million but a book value of roughly $8.00 per share. Apparently, there is some hidden deep value in the company owned real estate as well which likely makes the book value significantly higher. We’ll be digging deeper to see what our next move should be.
Ok, that’s all for now. Hola friends….
Other Stuff I’ll talk about how I try to value rapidly growing microcaps next week.
This Week I’m Reading: Quality Shareholders – How the Best Managers Attract and Keep Them – Lawrence Cunningham - Anyone can buy stock in a public company, but not all shareholders are equally committed to a company's long-term success. In an increasingly fragmented financial world, shareholders' attitudes toward the companies in which they invest vary widely, from time horizon to conviction. Faced with indexers, short-term traders, and activists, it is more important than ever for businesses to ensure that their shareholders are dedicated to their missions. Today's companies need "quality shareholders," as Warren Buffett called those who "load up and stick around," or buy large stakes and hold for long periods.
To your wealth, Paul and Trevor |