[...] remember that INSM is still trading at less than its net net value. There hasn’t been much action or news on the progress of the company’s strategic [...]

[...] all the companies are supposedly growing and profitable, there are no net nets or other cheap [...]

[...] a full quarter, INSM still remains as a net net selling below liquidation prices despite the market run up during [...]

[...] wrote about it previously because INSM is a cheap value stock and also a pure Benjamin Graham net net stock after running it through the [...]

[...] INSM is a net net stock offering a big margin of safety. It’s current position with a huge cash balance allows it to pursue strategic alternatives to increase shareholder vale. Bio-pharma is outside of my circle of competence but I feel the downside is very well protected. [...]

I agree with a lot of what you said. My comments are in the TSRI forum section. Floris also provided some excellent comments.

INSM is something I am very intrigued by, but TSRI seems to be a safer net net opportunity because any sort of significant appreciation in the stock price doesn’t rely on any major event (i.e. M&A, drug trial/approval etc.) All TSRI has to do is continue to do business as usual and in 12-18 months I would think it should be trading at $3.50-$4.00.

What do you think?

Yes the high inventory is why I discount it. It’s because the more specialized the inventory is, the more you have to discount it, not because the company is in a bad situation.

Im sure you are well aware that after 1 year, the current inventory will be sold at cheap prices even in retail stores. Golf equipment and styles change so quickly that the price is never sustainable.

So my argument is that while ADGF may have tangible assets, the margin of safety will erode even quicker.

INSM has cash which they could easily burn, but there is a chance that it could make a return. Can’t say the same about golf clubs though. The only direction club prices move is down.

It is due to the high inventory of ADGF that you measure the liquidation value being only 2,66. This assumes the company is in dire straits and will need to liquidate these assets at low prices. This is not the case for ADGF. The golf clubs are great and would most likely sell at or near cost.

The issue I have with ISM is that I have no clue about the business and the golf business is much easier to understand. Furthermore I personally know they make great golf clubs, which makes me doubt that they will go under (I am considering buying adams hybrids because they are better than the major brands).

The risks for ADGF are much more tangible whereas the risks for pharma are more difficult to understand. Pharma can have a tendency to waste cash and reduce cash exceptionally quickly. This is not the case for a consumer manufacturer, the expected outcome is much easier to estimate.

All in all the risk/reward ratio for is easier for me to understand and increases the confidence level (circle of competence)

reg,

Floris

Will have to look into it.