Issue 12: Small/Mid

Didn’t go through nearly as many companies to finish this issue; I stayed away from the computer software/services industry. My friend’s father is a major player in that industry and I’ve already taken a look to know that it isn’t worth it for me. The three ad companies, and the one petroleum producing company, were all terrible in this issue. Really, all I looked through were the oilfield services & it was somewhat interesting to see. Many of them have extremely high growth rates due to their lack of need for working capital. Some of them aren’t getting high enough returns out of their assets, so to continue at such high growth rates, many are issuing additional shares for funding. While not good for shareholders, it’s interesting to see whether it’s creating or destroying value.

Interesting Prices:

  • Flotek Industries- it happened again; I need to keep up with ValueLine in the future. Issue 12 came out in November, this stock is up 400% or so since the issue was released & it was at a great price. Not any more, I just wanted to list it in case you might be interested.
  • Hercules Offshore- up 50% since the issue was released, still at a solid price if it returns to previous profitability. I’ll look into it because I know the industry well. I think it may be interesting as high as $500 MM if profitability looks like it could return.
  • Hornbeck Offshore- also could be close to a good price, will take a look

No great businesses, nor were there any that I found interesting enough to look into when it’s at a bad price. I’m looking to go through my “Interesting Situations” tab this week for opportunities, so check there for my thoughts as the week goes on.


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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