Entering text into the input field will update the search result below

Aberdeen International: Global Resource Investment Company Trading At 38% Of Its Book Value

Tom Fraine profile picture
Tom Fraine


  • Buy rating for Aberdeen International; $0.18 target price.
  • Net asset value per share was $0.36 in latest interim report and may be significantly higher after it sells its position in Potasio y Litio de Argentina S.A.
  • Decreased expenditure in latest quarter signals improved outlook for future profitability.
  • High level of inside ownership, and company repurchasing its shares.

Company Profile

Aberdeen International (OTCPK:AABVF) [AAB:CN] is a global resource investment company and merchant bank. Its net asset value, $31.7m at 30th April 2017, is significantly higher than its current market capitalisation of $12.9m. It invests in small capitalisation companies in the metals and mining sector. 59% of its portfolio is allocated to private companies, which Aberdeen seeks to assist prior to their IPOs with its managerial expertise.

Between 8,500 and 614,500 shares were traded on any given day last week, meaning the stock is liquid enough for retail investors, managing relatively small amounts of capital, to trade at reasonable prices. However, it is out of scope for large institutional investors, which brings into question whether its stock is fairly priced.

With net income of $9.8m in the most recent financial year and a price-to-book ratio of 0.38, the stock appears extremely undervalued at a first glance, but the future profitability of the company is highly uncertain and its holdings, as well as its own stock price, are highly volatile.

Management and Governance

The management’s past performance is a key reason for the stock trading at a major discount to its book value. It has a record of destroying shareholder value and compensation has been unjustifiably high.






Net Income






Equity Value












*Year Ending 31st January 2017

Three out of five board members have served for at least 10 years, which is against best practices for corporate governance. A long-standing relationship with the managers brings into question whether the board is acting in the best interest of the shareholders, which is a concern given the level of compensation awarded. Ideally, at least 75% of a board should be independent. Aberdeen has three independent

This article was written by

Tom Fraine profile picture
Value investor specialising in nano-cap stocks that trade at a discount to their net current asset values

Analyst’s Disclosure: I am/we are long AABVF. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.