Stanley Gibbons

PUBLISHED: Jan 25 2016 @ 08:44 | Comments (0) |

I’ve searched the entire market for a possible new net current asset value, NCAV, investment. Rather disappointingly I found nothing that meets my criteria.

When the market has fallen by 20% you might expect more bargains to be around. Perhaps it needs to fall further before there will be real bargains created through neglect and rejection.

In the meantime I will not lower my standards, but wait.

It is perfectly possible that I’ve overlooked a potential candidate. If you know of any, please could you let me know?

Stanley Gibbons

Stanley Gibbons (LSE:SGI) came closest to being accepted as a NCAV investment.

It share price has fallen to a fifth of its previous level. It is now 75p giving a market capitalisation of £35m.

It was only in 2013 that it paid £46m to buy Noble (coins, etc.), and 2014 that it bought Mallett (antiques) for £8.6m.

So, its current MCap is way below the value that it placed on a couple of its subsidiaries, let alone the value within its traditional stamps business.

Assets

In September 2015 Stanley Gibbons had a total of £77.8m in inventory and receivables (the only current assets).

If we deduct both current and non-current liabilities of £45.3m then the first-glance NCAV is £32.5m – not far off MCap.

However, to be really cautious, we should not count all inventory as it is stated on the BS, nor should we assume that all the accounts receivable will be collected. The rule of thumb is to remove 33% of inventory and 20% of receivables.

On doing this the MCap becomes much larger than the NCAV.

Even if I add the value of………………To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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