One I own but haven't seen mentioned in the article or comment section is Decker Manufacturing (DMFG). Midwestern manufacturer of nuts and bolts. Trades at around book, little debt. Income growing and trades at a P/E of around ~6. Have you ever evaluated this one?
My 2 cents on WELX: I held this for a brief time in 2017 and sold with an insignificant loss. At that time, their stated business was ""Winland provides solutions that protect perishable assets against loss and ensure data-logging compliance for organizations with regulated storage conditions. Winland's cloud-based Critical-Environment Monitoring Solution delivers early incident detection, notification, standardized response protocols, reporting, and the remote management of critical-condition environments." This sounded interesting, though I was concerned that a full 50% of their sales was to a single distributor (Anixter) and they sold some of their stuff on Amazon, with very few reviews. It sounds like they still do a bit of this business? I invested in NSSC instead, until early last year.
They also had an investment in a travelling Beatles museum - not as cool as the Thing, but still...!
I have a note that in 2005 they were a supplier of some sort to the Select Comfort mattress folks, then did a complete makeover.
Anyway, the very thought of the crypto thing gives me hives. But they sure are wide-ranging.
Check out PDX - under the radar way to play the Venture Global IPO for next week. 10% discount to NAV. NAV has a conservative valuation for the IPO. IPO range is stale compared to Cheniere (ticker LNG) which rallied 10% this week. And the IPO is likely to be hot, pricing during inauguration week.
First, let me say great article! I have heard of almost all of the stocks mentioned in the post and actually own small sums of two of the ones you presented. They are in a small, dusty corner of my investment portfolio, but I would be glad to share my experience ( nearly 20 years) owning them.
1) Detroit Legal News. Management overall all seems capable and very shareholder friendly for an OTC company. They aren’t really in a high growth, super profitable business but seem to do ok year after year. They just recently bought another small printing company to combine with their operation. So maybe some synergy will happen. In the past, as mentioned, they have paid several large special dividends usually from asset sales. This seems to be over, barring a total liquidation or some other extraordinary event. They used to mention in the annual reports such assets like the parking lot sold for I believe 3M. For several years now though, there has been no mention of anymore hidden assets I could find. So, it looks like now they are just focusing on running the printing business and maybe slowly growing that out.
2) Reserve Petroleum Company. Of course, they live and die on the price of oil. When oil is high, they can make pretty satisfactory returns, but usually results vary quite a bit. They have several investments in other businesses, an office building, a water company involved in the oil business, and some property around Oklahoma City, etc. These investments don’t seem too material overall to their results. They have a strong balance sheet, a good amount of cash. And have always paid a dividend which varies with oil prices. They slowly are repurchasing shares year over year, sometimes a few hundred per year. Interestingly, they almost always purchase the shares below the trading price. A year or two ago, if I read the annual report correctly they purchased a chunk of shares at a ridiculously low price. I emailed the company to verify the price they paid and if any more such purchases were in the foreseeable future. Unfortunately, I never heard back.
Great post Dave, appreciate the list and your insights.
I think you're really spot on with there being much less investable OTC ideas these days. I always go back to some of those old OTCAdventures or Oddballstocks posts back many years ago and see the kinds of ideas that were out there and compare them to today and it's really hard to underwrite many of these ideas now. Even with banks I find some of the ideas pretty difficult either on price or on the balance sheet. I spend a good deal of time looking in the UK and Japan and I rarely find a small/OTC idea in the US that I would take over ideas I find in either of those countries (currency issues aside).
I think the main one I would consider to have good investment potential would be: Pardee Resources - PDER and Detroit Legal News - DTRL.
Maybe Paul Mueller Company - MUEL if they can really continue on that trend.
Blue Dolphin Energy Co. - BDCO, that one must be hard to trade around since it's OTC and you kind of need to get an entry and exit to make it work. Unless Crack spreads get much wider for much longer than in the past. But even then, you can get really good assets at price that are quite good in the large cap of the space (like Marathon Petroleum).
Dave are you familiar with CPKF? OTC Virginia-based bank that seems to be very well-run. If you look at their financial history you’d never even know that the GFC happened. Very cheap on deposits and probably a normalized 7x earnings. Just curious because I’ve never seen you cover it; maybe there is something I missed!
As somebody who was once solidly in the “rat poison” camp, I am curious how much you have read / listened to Murray Stahl? You curiously did not mention him in the WELX discussion. He has more or less singlehanded ly opened my mind to BTC / crypto. Now have modest exposure via his vehicles. Those were also omitted here though they are most certainly interesting and worth learning about for anybody turning over rocks in OTC land (FRMO, HKHC).
I use Endo’s products. Like a lot. All the time. Do you have any extra btw?
This is just like twitter used to be
<will.ferrel.imjustlivingthedream.gif>
Definitely seems like something Dave would say
Rumor has it that Percy is negotiating a purchase of The Thing, so we may soon have a chance to see its true value.
Nice to see you back on here, Dave 👍🏻
Thanks! I have been busy. I will try to be more active now that things are calming down.
One I own but haven't seen mentioned in the article or comment section is Decker Manufacturing (DMFG). Midwestern manufacturer of nuts and bolts. Trades at around book, little debt. Income growing and trades at a P/E of around ~6. Have you ever evaluated this one?
I own some. It's a nice little business and cheap.
The new logo looks great
The THING!!!
Always enjoy your work, Dave!
My 2 cents on WELX: I held this for a brief time in 2017 and sold with an insignificant loss. At that time, their stated business was ""Winland provides solutions that protect perishable assets against loss and ensure data-logging compliance for organizations with regulated storage conditions. Winland's cloud-based Critical-Environment Monitoring Solution delivers early incident detection, notification, standardized response protocols, reporting, and the remote management of critical-condition environments." This sounded interesting, though I was concerned that a full 50% of their sales was to a single distributor (Anixter) and they sold some of their stuff on Amazon, with very few reviews. It sounds like they still do a bit of this business? I invested in NSSC instead, until early last year.
They also had an investment in a travelling Beatles museum - not as cool as the Thing, but still...!
I have a note that in 2005 they were a supplier of some sort to the Select Comfort mattress folks, then did a complete makeover.
Anyway, the very thought of the crypto thing gives me hives. But they sure are wide-ranging.
I remember them funding that Beatles memorabilia traveling exhibit! I think the results were underwhelming.
My recollection is that the Beatles delivered a donut.
Perhaps some of these missed the list because you own them, but AMNF, CZBS, FFBB, and QEPC are all interesting.
I'll second the word on AMNF. I've been a happy investor for several years.
Definitely some great names. I own a few so I did not mention them. For these I was definitely reaching a tier below the best quality OTC companies.
Check out PDX - under the radar way to play the Venture Global IPO for next week. 10% discount to NAV. NAV has a conservative valuation for the IPO. IPO range is stale compared to Cheniere (ticker LNG) which rallied 10% this week. And the IPO is likely to be hot, pricing during inauguration week.
I like $MUEL the most on this list.
Hello Dave,
First, let me say great article! I have heard of almost all of the stocks mentioned in the post and actually own small sums of two of the ones you presented. They are in a small, dusty corner of my investment portfolio, but I would be glad to share my experience ( nearly 20 years) owning them.
1) Detroit Legal News. Management overall all seems capable and very shareholder friendly for an OTC company. They aren’t really in a high growth, super profitable business but seem to do ok year after year. They just recently bought another small printing company to combine with their operation. So maybe some synergy will happen. In the past, as mentioned, they have paid several large special dividends usually from asset sales. This seems to be over, barring a total liquidation or some other extraordinary event. They used to mention in the annual reports such assets like the parking lot sold for I believe 3M. For several years now though, there has been no mention of anymore hidden assets I could find. So, it looks like now they are just focusing on running the printing business and maybe slowly growing that out.
2) Reserve Petroleum Company. Of course, they live and die on the price of oil. When oil is high, they can make pretty satisfactory returns, but usually results vary quite a bit. They have several investments in other businesses, an office building, a water company involved in the oil business, and some property around Oklahoma City, etc. These investments don’t seem too material overall to their results. They have a strong balance sheet, a good amount of cash. And have always paid a dividend which varies with oil prices. They slowly are repurchasing shares year over year, sometimes a few hundred per year. Interestingly, they almost always purchase the shares below the trading price. A year or two ago, if I read the annual report correctly they purchased a chunk of shares at a ridiculously low price. I emailed the company to verify the price they paid and if any more such purchases were in the foreseeable future. Unfortunately, I never heard back.
Happy hunting,
Dan
Great post Dave, appreciate the list and your insights.
I think you're really spot on with there being much less investable OTC ideas these days. I always go back to some of those old OTCAdventures or Oddballstocks posts back many years ago and see the kinds of ideas that were out there and compare them to today and it's really hard to underwrite many of these ideas now. Even with banks I find some of the ideas pretty difficult either on price or on the balance sheet. I spend a good deal of time looking in the UK and Japan and I rarely find a small/OTC idea in the US that I would take over ideas I find in either of those countries (currency issues aside).
Wish you best of luck on the new fund. Thanks!
Really cool post
I think the main one I would consider to have good investment potential would be: Pardee Resources - PDER and Detroit Legal News - DTRL.
Maybe Paul Mueller Company - MUEL if they can really continue on that trend.
Blue Dolphin Energy Co. - BDCO, that one must be hard to trade around since it's OTC and you kind of need to get an entry and exit to make it work. Unless Crack spreads get much wider for much longer than in the past. But even then, you can get really good assets at price that are quite good in the large cap of the space (like Marathon Petroleum).
Dave are you familiar with CPKF? OTC Virginia-based bank that seems to be very well-run. If you look at their financial history you’d never even know that the GFC happened. Very cheap on deposits and probably a normalized 7x earnings. Just curious because I’ve never seen you cover it; maybe there is something I missed!
Thanks for this great commentary.
As somebody who was once solidly in the “rat poison” camp, I am curious how much you have read / listened to Murray Stahl? You curiously did not mention him in the WELX discussion. He has more or less singlehanded ly opened my mind to BTC / crypto. Now have modest exposure via his vehicles. Those were also omitted here though they are most certainly interesting and worth learning about for anybody turning over rocks in OTC land (FRMO, HKHC).