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Is American Lorain Corporation(ALN) Pure Value Investment Stock?

|Includes:American Lorain Corporation (ALN)

To answer this question let's look at some basic values of ALN below.

Stock price: 1.23 per share.

EPS: 0.59

P/E: 2.10

Market cap: 42.92

ALN is not paying dividends.

To calculate intrinsic value of a stock I will simply divide net tangible assets on number of shares outstanding (165 456 000/ 34 620 000 ) which gives

Intrinsic value : 4.79 per share.

This means that with the current stock price(1.24) 1 dollar of ALN costs around 25 cents.

Year-to-year changes of key ALN values
  2010 2011

YtoY change





Gross profit 41,884 45,013 7.5 51,108 13.5
Operating Income 27,518 27,916 1.4 31,859 14,1
Net Income 19,248 21,084 9.5 21,744 3.13
Assets 97,990 128,424 31 160,159 24.7
Total Liabilities 53,072 70,378 32.6 79,612 13.1
Net Tangible Assets 117,033 142,895 22.1 165,456 15.8
Change In Cash and Cash Equivalents (3,375) (1,349)   13,933  

From the table above looks like ALN getting stronger every year.

Why ALN stocks is at current level? First of all in my opinion it is absence of other sources of information about ALN except SEC filings. At least in English speaking press.

Also what has to be mentioned is "Go private offer" from ALN's CEO Mr.Si Chen (disclosed in Form 8-K on October 15, 2012) for 1.60 per share, from the Intrinsic value point of view this offer is not very good, but from current stock price "go private offer" can be considered as kind of insurance or guarantee to have around 25-30% grows of money invested in ALN at current price.

Other consequences of the "Go private offer": two cases were filed in the States of Wisconsin and Nevada, respectively. Nevada suit was voluntarily dismissed by the plaintiff. The consequence of Wisconsin suit was that Mr. Tad Ballantyne resigned from the Board of Directors (see 8K/A filing from 3/15/2013)

What is interesting is an election of Mr. Wu instead of resigned mr.Ballantyne. Mr.Wu service record includes his participation in numerous private placements and M&A deals. Could ALN become next target for merger?

Disclosure: I am long ALN.

Additional disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Also this is my first article so your opinion is very valuable for me.

Stocks: ALN