special situations investing

special situations investing

Bowlin Travel (BWTL.OB).. at 1.80 or so.. asking price..

Kind of a steal of a company..

at 1.80 it trades around 12x earnings.

earnings being 15 cents per share.

earnigns could conceivably go to 30 cents over next 3 years.

why.. they just finished a major capex program of 5 to 6 million from 2001 to 2005. this is major stuff for a
company of this size. so i,d largely expect the fruits of this all to show at some point.

that it has had some impact cannot be denied.

at operating level EBIT has gone from 700K to 900K.. in last 2 years. not enough. but patience. they just finised the capex program so i ,d give
them a big of time to move thsoe EBIT number to 1.5 million ,e ve to 2 million with more patience.

they should not spend much in capex in coming year.

so teh already pristine balsne sheet with net debt of 2.2. milion and equity of 12 million (or 2.63 per share(, shoudl become more solid in time.

in 2 years they shoudl ahve net debt of zero.

the free cassh flow in last year wa 1.0 million. so this puppy trades only at 7x free cash flow.

need more reasons to invest in thie micro cap, well managed family business. read their annual report.

cheers, Z

Telesystems Wireless (TIW.TO/TIWI)

Looks like Telesystems Wireless is getting one step closer towards making first liquidation distribution. The value of the Toronto traded stock was highlighted as having a value of around Can $ 19.90-20.00., and now still trading at 19.40. Supposedly the first distribution to be made will be to the tune of Can $18.80. Thus could be a nice return of capital in a very short time frame.

On the US security (trading under TIWI), things become a bit more complicated due to currency transaction (company and assets are really in canadian dollars, not US). Nevertheless mabye value of the assets can be translated into US $16.35-16.50 per share. And paper trading at 16.10 or so. Seems like similar liquidation upside in the US shares as in Canadian ones.

Needless to say when we first looked at this in late July, the US stock traded at 15.90.. the canadian stock traded at the same Can $ 19.40. We noted at the time that the translation of Can $ into US $ favored an investmetn in the US assets given undervaluation.

The 20 cent upward movement since in TIWI seem to have given us right. the canadian stock has not moved anywhere.