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Autoinfo's Takeover Severely Undervalues The Company

|Includes:Autoinfo Inc (AUTO)

AUTO, through its wholly-owned subsidiary Sunteck Transportation, is a non-asset based truck-brokerage operating in the United States and Canada. To keep things simple, this is a fantastic compounder and an amazing FCF generator.

A few articles listed below cover the ground rules for the company:

Overview and Comps

Discussion of the Takeover - HeresyValue

Discussion of the Takeover - OTCAdventures

For a quick summary, the company is getting bought out at roughly 8 times earnings, which generally equals FCF. The business is extremely resilient:

 

 

 

2007

2008

2009

2010

2011

3Qs 2012 (Sep 30)

Op Income

2,947,000

4,195,000

2,828,000

5,676,000

6,432,000

5,646,000

Net Income

1,604,000

2,224,000

1,418,000

3,055,000

3,638,000

3,305,000

Book Value

13,816,000

16,309,000

17,924,000

21,107,000

24,892,000

28,253,000

There are also several large value investors holding stock in the company (covered in HeresyValue) and evidently many smaller value investors holding positions in the stock.

The business could easily be worth double the take-out price to a competitor, if not more. Standalone, the business is already worth more than the take-out price.

Stocks: AUTO