Issue 8: Small/Midcap

This issue was similar to Issue 7, not too many companies/industries that captivated my interest.  It is very difficult for me to find any interest in small drug companies that have been public for ten years and haven’t yet posted a profit.  In the meantime, all their shareholders fit the bill through large issuances of common stock to fund operations.  Why bother?  It’s not worth it to me.   There are a few businesses I found interesting in the drug industry that are more established, as well as a few diversified businesses.  Great businesses in this issue:

  • Raven Industries Inc
  • Tyler Technologies
  • USANA Health Sciences

No interesting situations, I ended up only finding a value for about 1/5 of these companies, so it shouldn’t surprise you, especially with the current level of the stock market.

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About Andrew Schneck

I am a value investor focused on misunderstood securities and industries, with an eye for long-term stock ownership.
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2 Responses to Issue 8: Small/Midcap

  1. Parth says:

    Im thinking of buying ARO. What do you think is a good price to get in at?

  2. schn1eck7 says:

    Hey Parth,

    I’m very close to averaging down on my original purchase- the market price fell below my avg. price purchased today. I’d say take a look at “owner earnings”, right around $330 MM today, so you would want to pay $2.2 B or so… this is about $24 per share. At this price, you could reasonably expect a 15-20% annualized return for the next 5 years.

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