Nat Hunt
Nano-cap, micro-cap, deep value

Alloy Steel International: 1X EV / Net Income, 62% Of Book Value For Growing Company

What should be the discount on a company whose CEO cares only about performance, and not stock price? That seems to be the chief question an investor in Alloy Steel International (OTCPK:AYSI) needs to answer for himself. Apparently, in Alloy Steel's case, Mr. Market thinks a huge discount is warranted. I think the market has over-reacted to an absurd degree.

Alloy Steel International currently sells for 2.2X TTM earnings. As of December 31, 2013 (the last reported quarter), the company had $8.0M of cash versus essentially no debt (notes payable totaling $270,000). If we back that $7.7M of net cash out of the company, we get an astounding P/E ratio:

$13.7M market cap - $7.7M net cash =...

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