Argo Group (ARGO). Valued at 40% of Net Working Capital

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Joined: November 29th, 2016, 10:21 am

Argo Group (ARGO). Valued at 40% of Net Working Capital

Postby FrankJohnstone » January 11th, 2017, 9:32 am

Argo Group Limited

These look extremely cheap on an asset basis ie. cash and net working capital.

"Argo's investment objective is to provide investors with absolute returns in the funds that it manages by investing in, inter alia, fixed income,
special situations, local currencies and interest rate strategies, private equity, real estate, quoted equities, high yield corporate debt and
distressed debt, although not every fund invests in each of these asset classes."

48.1M shares in issue
At the current 15.5p ask price the market cap is £7.5M

At current exchange rate of £1=$1.215

Cash = $9M = 15.4p
Net Working Capital = $23.4M = 40p

Exceptionals in the H1 results caused a stonking $4.8M profit.
I'm assuming ongoing trading at approximately operational break-even. An estimate but looks about right if you strip out the exceptionals.

Two of the directors, the Rialas Brothers hold around 50% of the shares.
I don't really like it when directors hold this much of the company but the shares are so cheap I think its more than factored in.

There is a share buyback programme (up to £2M) currently in operation. ... 00100109L/
They've not been using it much recently probably because there are not many shares available.

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