Clarus (CLRS) a NCAV stock – is it worth investing in?
Posted on | February 22, 2010 | No Comments
Shadowstock posted this analysis of Clarus (CLRS). It is an interesting idea.
CLRS is essentially a shell company with Net Current Asset value of approx. $4.78/share. All its assets are either cash or short term investments. At its closing price of $4.45 today, it is trading at a small discount to its NCAV value.
I first looked at CLRS about a year ago, when the Net Asset value was a little better and the stock price was lower. I never pushed the button on the stock, because it seemed that Kanders (CEO and major investor) had a fair amount of time back then to make an acquisition, but had failed to do anything except burn cash. The Net Operating Lossess (NOL) will continue to expire each year and there is a small cash burn while nothing is going on. I do not know how one evaluates or values NOL’s, so I cannot confirm or deny Shadowstock’s estimates of $1.30/share.
While there is some small downside protection, on an asset valuation, everything else about the company seems speculative, including what type of business it might acquire or whether or not it will acquire another company at all. Since it is neither profitable nor does it have a sufficient margin of safety, CLRS is a pass for the moment.
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