A Dutch individual investor who read my post asking for stock ideas from other countries, posted a write-up on Crown Van Gelder over at GuruFocus.
The equity of CVG is available at a discount to its value in liquidation.
The opportunity exists because
- Earnings are depressed due to rising pulp prices.
- The company is managed with many interests in mind; just one of which is the interest of shareholders.
- This is perceived to be a commodity business with no opportunity for differentiation.
Valuation of Assets and liabilities (numbers in EUR)
- Current assets (mostly inventory at cost and receivables) => 50m
- PP&E (two paper mills, a modern gas fired power plant and a harbour) => 65m
- Total liabilities => 30m
- A 50% stake in IFO BV. A logistics company that pays a 1m dividend.
Market cap is 30m so the facility, with a book value of 65m, is available for say....15m net. This is one of the cheapest publicly traded companies in the Netherlands…
...CVG managed about 5% net margin over the past decade (excluding 2009 and 2010). The huge losses in recent years were mainly write downs of the assets; CVG is not bleeding cash….3% net margin over a full cycle => 5m.
The author also gave me the name of another interesting Dutch stock: DOCdata.
By the way, I realized in my response to Pierre’s question about finding foreign microcaps, I kind of skirted the issue of finding small stocks in countries where you don’t speak the language. Instead, I just gave a list of interesting stocks from the U.K.
To prove even Americans can find small stocks in France, here are two French micro caps worth looking at: Poujoulat and Precia.