I've recently taken a furlough from the world of investing. I climbed a small mountain and wolfed down butternut squash apple salad and a few former feathered friends, downing it all with copious quantities of tap water. The next time I get the urge to whirl myself at high velocity by winding up a makeshift baby swing seat suspended from a tree branch, I'll do it before the sweet potato casserole.
Between bites of dressing, I decided I owned plenty of shady Greek tanker companies. Why not buy something conventional for a change? I'm always getting notices from Schwab that my portfolio is "dangerously concentrated". Sure, my Schwab account is 100% in a single pink sheet penny stock, but can't a guy catch a break once in a while? I'm ready to settle down, live the quiet life, sit back and chillax. R&R is the new R&D.
I only have so much brainpower. I can spend that brainpower tracking liquefied natural gas inventories, or I can spend it enjoying my extended lake vacation. And as anyone who's been on an extended lake vacation knows, nasty surprises have a way of spoiling the fishing. I want something I can depend on, something that will still be there if I catch a few winks after lunch. Something I can hang my hat on. Something like Tesla.
On second thought, maybe not. I want something so boring it doesn't even interest the fine folks at my friendly neighborhood department of water quality statistics. I want money market funds. Being a bargain hunter and all, I'd never dream of buying a straight money market fund.
I looked for "cash replacements" - companies selling for less than cash in the bank, with "a little something extra". I learned the importance of "a little something extra" from Grandma's cooking. Whenever she cooked chicken, she would add a little bit of this, and a little bit of that, until it was just right. Anyone who gives you the silverware just for the privilege of parting with "a little something extra" clearly isn't familiar with Grandma's cooking, but that's their problem.
Cash replacements aren't hard to come by. They're scattered left and right. A few months ago, I picked up Support.com for $1.53, and it had more than that in cash. The indefatigable Richard Bloom, after ninja slicing the incompetent C-suite in a mad bid for unlimited power, had taken the helm, slashing champagne expenditures and milking the support center for cash flow. In his spare time, he started a tech support biz to help out grannies with iPhone issues. Right about then, another activist bought a big stake, demanded a big dividend, and roundly scolded Ricky for blocking him from buying more. It wasn't an especially hard call that the stock was worth more than $1.53. Buy the cash at a discount, and get a profitable tech support center for free, with a disruptive granny assistance startup for dessert.
Why didn't I tell you about this sooner? Well, I'm on vacation. I have deck chairs to rearrange.
Let's not forget Rubicon! RBCN is a pile of cash, with real estate and a pill delivery company thrown in for free. As a nice bonus, Rubicon doesn't have to pay taxes. All of this would count for nothing if management were running the company into the ground. Fortunately, Timothy Brog put a stop to that and is lying in wait for a big acquisition, wearing camo garb as necessary. Sure, there's a bit of cash burn from overhead (and Tim's salary), but I'm willing to bet he'll wave a magic wand and make money for everyone.
And then there's CBA Florida. Once upon a time, the fellows at CBA had the bright idea of getting into the squeezing-blood-from-umbilical-cords-and-putting-it-in-storage-tanks line of business. The expected synergies with their TV & Radio Advertising division did not materialize. That's why a hedge fund bought a bunch of stock and fired everyone and sold everything (for the princely sum of 1.1 cents per share). I have a hunch the cash will make its way back to us presently. For some reason, people keep selling me stock for 0.75 cents.
You don't even have to find them yourself. David (of Elementary Value fame) tipped me off on two. ORGN trades below net cash and has tax losses to shield pretty much any amount of future income from taxes. And then there's that company trading at net cash, with a dump truck full of patents (compliments of the chef), and a neat share buyback program. Plus, they're suing a bevy of multinationals for patent infringement. I conveniently forgot the ticker symbol, but the point is you can find cash replacements all over the place.
Toodle-oo - back to rearranging deck chairs.
I own shares of SPRT, ORGN, SYEV, CBAI, NTIP, RBCN, CNAT and so many more!
