Scope Industries: An Under-The-Radar OTC Stock (Podcast)
Summary
- In this episode of The Intelligent Investing Podcast, Eric Schleien and Anthony Waldichuk discuss another unlisted stock, Scope Industries.
- The CEO, Meyer Luskin, has been at the helm since 1961 and Anthony describes him as the "Poor Man's Warren Buffett"
- Like Buffett, Luskin is also a billionaire. Unlike Buffett, most people have never heard of Luskin or Scope Industries.
In episode #46 of the Intelligent Investing Podcast, I sat down with Anthony Waldichuk to discuss Scope Industries (OTC:SCPJ).
Scope Industries is an unlisted dark company traded over the counter. The company was formerly traded on the AMEX and has been in business for 81 years. The current CEO has been at the helm since 1961 and took over the company in the 1950s. He writes letters to shareholders every year. While the company does not report financials, it's not difficult to obtain these shareholder letters if you request them from the company.
Anthony, who I interviewed on the podcast, has been a shareholder for the past 15 years and Scope Industries was one of the first unlisted stocks he ever purchased. The stock is illiquid, trading just a few times per week. However, the company is larger than many dark companies, currently just under $200 million.
Meyer Luskin has used Scope Industries to purchase businesses in various industries over the years. Currently, the majority of the business is in recycling expired bakery products into animal feed. Scope Industries pioneered this process. This recycled waste then gets used to make horse and cow feed.
Interestingly enough, the company tends to track the price of corn as the business is directly in competition with corn as food stock.
While the business has hit a rough patch over the past couple of years, my bet is the company will make money again as Luskin has a knack for intelligent capital allocation and also keeping costs extremely low.
Like Buffett, Luskin is a philanthropist. In 2010, Luskin issued a special dividend of $66/share when the stock was trading at $70/share. He used this cash to donate to UCLA, leading to the second largest gift UCLA has ever received behind billionaire music mogul David Geffen's $200 million donation to UCLA's medical school in 2002. $50 million of Luskin's gift established the Meyer and Renee Luskin School of Public Affairs at UCLA, the other half is earmarked for constructing an off-campus conference center.
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