Alec Mazo
Long/short equity, value, deep value, special situations

Automodular Corporation: A Special Situation Decoupled From Market Volatility

Editor's Note: Automodular Corp. trades on the Toronto Exchange under the ticker AM.TO with an average daily volume of C$140,000.


Automodular Corporation (OTCPK:AMZKF) shares are worth C$2.71-$2.86. Market price is $2.15 CAN, a 24.5-30.7% margin of safety to intrinsic value.

(in thousands)

Intrinsic value: $53,690
Market Cap: $41,660
Workout return: $12,030
Return after 15% Canadian Tax: $10,226 (24.5%)

Automodular Corp's special workout situation offers a chance to earn 25% in one year. The risk-reward scenario is compelling with limited downside and some upside optionality in excess of the 25% expected return. This workout investment is decoupled from equity market fluctuations because value realization depends on the company winding down within the next 9-12 months.



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