This is company I discovered a while back..not sure if Jae introduced it to me or not. I can't remember. Anyways….
LOAN issues short term secured commercial loans to small businesses, mainly in the NY area. They also have an online yellow page business. (I do not think this business is material) Based on the Graham net net calculations it is worth roughly $2/share give or take a quarter. (I'm not a math whiz and while this company does have positive earnings and free cash flow it is not included in my calculations) Currently trades at $1.03 and is very illiquid. (think DCU illiquid) Recently, management approved the authorization to buy back 100k shs of stock, with only 3.3 million outstanding and the CEO owning 1.8 million shs. The CEO also took a paycut recently which is unheard of these days. They do have a very conservative balance sheet…
-600k in cash and marketable sec.
-6.9 mill in short term loans (all performing – see not below)
-445k in liabilites
-7.5mill / 3.3 mill shs = $2.27 / shs
my calculations do not include other investments, property and equipment, or other assets…simply cash and all the liabilites from the recent 10q.
I do have some concerns tho…
-ceo owns over 50% of the company and can whatever he chooses
-they are in the business of issuing commercial loans and I have to imagine they will eventually suffer some losses but per pg 11 of the 10q.."To date, we have not experienced any defaults and none of the loans previously made have been non-collectable, although no assurances can be given that existing or future loans may not go into default or prove to be non-collectable in the future."
For disclosure purposes I do own shs
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