Q: Good morning,
OCI appears undervalued based on all the companies it has invested in, which are AE,ARIC,XXIX,MIS,MERG,KTR. The market cap on $18 million is less then market value of its investments in these companies.
Thanks,
George
OCI appears undervalued based on all the companies it has invested in, which are AE,ARIC,XXIX,MIS,MERG,KTR. The market cap on $18 million is less then market value of its investments in these companies.
Thanks,
George
5i Research Answer:
Certainly it is interesting, but we do not typically suggest $18M market cap companies, on risk metrics alone. While value may be there, it is very hard for tiny companies to attract new investors. Some of its assets may be difficult to sell (KTR, for example, is a 2-cent stock). The company is taking steps to try to bring out value, and intends to spin out some more assets. Insiders own 6%; Eric Sprott owns 8%. The stock is up 16% YTD but we would still see it as too small and risky and do not follow it closely.