Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Falling From Sky (Ticker: LQDT)

|Includes: Liquidity Services, Inc. (LQDT)

Falling from Sky


Liquidity Service, the largest online surplus asset buyer market, starts in 2002. Over the past 12 years, it has grown by adjusted EBITDA at 40.4% CAGR and with 10% adjusted EBITA margin. Prices peaks in 2012 at 65 and fell down

to 12 now. They currently face short-term challenges.

* Adjusted: include adjustments for stock-based compensations and a portion of certain acquisition pyaments & goodwill impairment.


1) A Leader in Niche Market ( Surplus Asset buyer Market), little and no competitors.

Market is still in early stage. (2% penetration rate for now)

In recent two years, company continues to grow on top line (much slower than before), but not on bottom line.

$57 cash and No Debt

Proven Business Model and Management Team over the past 10 years.

2) currently it is being priced PE @ 12 and EV/EBIT = 4.7, significantly lower than peers in the industry.

3) Insider is buying it. You could buy stocks now lower than insider now! Insider owns a big chunk of stocks.


Before 2012 it grows EBITDA at 40.4%. I do not think it will stop growing. I think it will continue to grow above 12% given their resources. Timing is uncertain. But given their cash position and valuation, they could do so many things to increase their earning.


It will take a while for market to recognize it

Disclosure: The author is long LQDT.