The Deep Value Week – 2024/51
Dividend Season, BOD rotations and a Delayed Report
Companies mentioned:
· Alico (ALCO) - Declares Dividend for Q1 FY 2025
· Fonar Corporation (FONR) - Changes Independent Auditor for FY2025
· Jewett-Cameron Trading (JCTCF) – Update on Enterprising Investor
· Nacco (NC) - Rankin Family Solidifies Control Over NACCO Industries Class B Shares
· Reko (REKO) – Buying Back Stock Again
· Senca Foods (SENEA) – Calvin Ott on Del Monte Pacific
· SigmaTron (SGMA) - Delays 10-Q Filing Amid Revenue Decline and Accounting Adjustments
· Tandy Leather Factory (TLF) – Also Mentioned by Enterprising Investor
· Village Super Market (VLGEA) - Leadership Changes, Dividend, and AGM Results
· Tree Island Steel (TSL) - Director Retirement and Quarterly Dividend Declaration
“Graham’s Geiger counter”
Benjamin Graham suggested that one way to measure the valuation of the overall market was to assess the number of net-nets available. When many such opportunities exist, it indicates a cheap market overall, while their absence suggests that the market is expensive. Today’s net-nets, however, are not the same as Graham’s net-nets. Many are un-investable being Chinese RTO’s, loss-making biopharma’s etc. But we do think it is interesting to follow this number over time, and what percentage of total listed stocks qualify as a “naked” net-net without any type of quality adjustments to make them investable. Below is a net-net screen from Stockopedia.
Alico (ALCO) - Declares Dividend for Q1 FY 2025
2024-12-13 │ Dividend │ P/TB 0.77 │ Agriculture │ FILING
Alico, Inc., a Florida-based agricultural company, announced a cash dividend of $0.05 per share for the first quarter of fiscal year 2025. The Board of Directors approved the dividend on December 13, 2024. The payment is scheduled for January 10, 2025, with shareholders on record as of December 27, 2024, eligible to receive the payout. At today’s stock price of $25.26, the annualized yield is 0.8%.
Also, Tyler Moody wrote briefly about the company on his Substack.
Fonar Corporation (FONR) - Changes Independent Auditor for FY2025
2024-12-11 │ Change in Auditor │ P/TB 0.62 │ Healthcare │ FILING
On December 11, 2024, Fonar Corporation announced a change in its independent auditor, replacing Marcum LLP with CohnReznick LLP. This decision followed a competitive selection process overseen by the company's Audit Committee. Marcum, which audited Fonar's consolidated financial statements for the fiscal years ending June 30, 2023, and 2024, was officially dismissed as of the same date. Marcum's reports for the previous fiscal years included no adverse opinions, disclaimers, or qualifications aside from noting that no audit of internal controls over financial reporting was required. Fonar confirmed that there were no disagreements or reportable events between the company and Marcum regarding accounting principles, practices, or procedures. A letter from Marcum, agreeing with these disclosures, was filed as an exhibit to the Form 8-K.
Nacco (NC) - Rankin Family Solidifies Control Over NACCO Industries Class B Shares
2024-12-17 │Insider Buying │ P/TB 0.54 │ Coal Mining Services │ URL
The Rankin family, through various entities, has updated several filings to consolidate and centralize their control over NACCO Industries' Class B Common Stock. As of December 13, 2024, AMR Associates NC, L.P., a Delaware-based limited partnership, acquired 203,972 shares, representing 13% of the outstanding Class B stock. This contribution aligns with a broader strategy to unify family-held shares, strengthen governance, and facilitate estate planning.
Collectively, the Rankin group now controls 1,542,757 Class B shares, representing 98.6% of the total outstanding. Key stakeholders such as Alfred M. Rankin Jr., Helen Rankin Butler, Clara T. Rankin Williams, and Victoire G. Rankin share voting and disposition powers. Alfred M. Rankin Jr. alone has shared control over 1,076,343 shares (68.8%), while Helen Rankin Butler and Clara T. Rankin Williams maintain shared control over 1,085,538 shares (69.3%).
The consolidation is governed by the AMR Associates NC Partnership Agreement and amendments to the NACCO Stockholders’ Agreement, effective December 16, 2024. These agreements enforce transfer restrictions, rights of first refusal, and coordinated decision-making, ensuring the family retains long-term control while supporting their estate planning objectives. These developments underline the Rankin family’s commitment to structured management and governance of their significant stake in NACCO Industries.
Reko (REKO) – Buying Back Stock Again
Canada │ Buybacks │ P/TB 0.42 │ Plastic Moulding │ URL
Reko International conducted several transactions involving the repurchase and reissuance of its common shares during the period of December 10–11, 2024. On December 11, 2024, Reko International repurchased and canceled 23,800 shares at a price of $3.05 per share, resulting in a total transaction cost of $72,590. Following this transaction, the company’s direct shareholding stood at 1,800 shares. On the same day, the company reissued the equivalent 23,800 shares at the same price, increasing its total shareholding to 25,600 shares.
On December 10, 2024, Reko International completed a smaller transaction, repurchasing and canceling 400 shares at $3.05 per share, for a total cost of $1,220. After this transaction, the company’s direct shareholding stood at 1,800 shares. Later the same day, the company reissued these 400 shares at the same price, bringing its shareholding to 2,200 shares. All transactions were executed at a consistent price of $3.05 per share, indicating stable valuation of the stock during the period. These activities highlight the company’s strategic focus on optimizing its capital structure, potentially aimed at enhancing shareholder value or supporting the share price.
Senca Foods (SENEA) – Calvin Ott on Del Monte Pacific
2024-12-13 │ Discussion │ P/TB 0.90 │ Food Production
SigmaTron (SGMA) - Delays 10-Q Filing Amid Revenue Decline and Accounting Adjustments
Business Update │P/TB 0.16 │ Contract Manufacturing │ URL
SigmaTron International, Inc. has filed a notice of late submission for its quarterly report for the period ending October 31, 2024, citing ongoing work to finalize accounting for debt modifications and related lender warrants. The company anticipates filing the report within the five-day extension period provided under SEC rules. Preliminary results indicate a significant revenue decline, with a decrease of $24 million to $75 million compared to $99 million for the same period in 2023. Management highlights that these figures are subject to change as the quarter-end review and audit processes are completed, which could result in material adjustments. The delayed filing and preliminary financial results reflect potential risks and uncertainties, including further adjustments or extended filing delays, as stated by the company.
Tandy Leather Factory (TLF) – Also Mentioned by Enterprising Investor
2024-12-16 │ New Report │ P/TB 0.68 │ Leather Retail │ URL
Village Super Market (VLGEA) - Leadership Changes, Dividend, and Shareholder Meeting Results
2024-12-13 │ Management Change │ P/TB 1.10 │ industry │ URL
Village Super Market, Inc. reported key leadership changes in the appointment of John J. Sumas as Chief Executive Officer and Nicholas J. Sumas II as President and Chairman of the Board. Both executives bring extensive experience within the company, with John J. Sumas having served in roles such as COO and General Counsel, and Nicholas J. Sumas II having held positions including Chief Marketing Officer.
At the company's annual shareholder meeting, the election of directors was completed with strong support for all nominees, including John J. Sumas and Nicholas J. Sumas II. Additionally, KPMG LLP was ratified as the independent auditor for fiscal 2025.
The Board of Directors declared quarterly cash dividends of $0.25 per Class A share and $0.1625 per Class B share, payable on January 23, 2025, to shareholders of record as of January 2, 2025. Village Super Market operates 34 supermarkets and three specialty markets across the northeastern United States.
Tree Island Steel (TSL) - Director Retirement and Quarterly Dividend Declaration
BOD Change & Dividend │ P/TB 0.63 │ Wire │
Tree Island Steel Ltd., a Canadian producer of wire products, announced the retirement of long-serving director Ted Leja, effective immediately. Mr. Leja, who has been with the company for over 20 years, played a significant role in both executive and board capacities. Executive Chairman Amar S. Doman expressed gratitude for Mr. Leja's contributions and extended best wishes for his retirement.
In a separate announcement, the company declared a quarterly dividend of $0.03 per share, payable on January 15, 2025, to shareholders of record as of December 31, 2024.
At today’s stock price of $2.94, the annualized yield is 4.1%
Jewett-Cameron (JCTC) - Launches Adaptable Low-Profile Gate Kit for Professionals and DIYers & Update on Enterprising Investor
2024-12-19 │ New Product │ P/TB 0.65 │ Gates │ URL
Jewett-Cameron Trading Company Ltd. has introduced the Adjust-A-Gate® Unlimited, a low-profile, complete gate kit designed for flexibility and ease of installation. The product enables users to customize gates up to 72 inches high and 84 inches wide, accommodating both horizontal and vertical designs. With a patent-pending anti-sag technology, the kit ensures long-term durability, solving common issues faced by gate owners. The comprehensive package includes steel corner brackets, all necessary hardware, and a detailed installation guide, catering to users of all skill levels.
Priced competitively, the Adjust-A-Gate® Unlimited stands out as a cost-efficient solution that eliminates the need for additional components like hinges and latches. The innovative low-profile design is suitable for diverse applications, from modern to traditional aesthetics, offering both strength and adaptability. Jason Boyd, Senior Product Designer, highlighted the product’s emphasis on efficiency and creativity, calling it a leap forward in gate construction.
The Adjust-A-Gate® Unlimited is now available through major retailers and online, reflecting Jewett-Cameron's ongoing dedication to innovation and customer satisfaction in the fencing industry. CEO Chad Summers expressed enthusiasm for the product’s potential to meet the needs of both professionals and DIY enthusiasts.
Also, Tyler Moody wrote a short update on JCTC.
The writer may own shares of the companies mentioned. This communication is for informational purposes only.
Del Monte has gone through so many ownership changes, including private equity. I don’t think they’re much of a challenge to Seneca. Seneca manufactures their own cans too, whilst the competition sub contracts this operation. And have I mentioned they own farm land, which is listed as historical cost on the balance sheet. Seneca also uses the Graham approach, always to looking to acquire at 60 cents on the dollar.
I never hear about Hanover anymore. I have to check what’s happening there. Do you have any idea what they have been up to. I still see there product in the super market. Last I checked (a few years now) they had two classes of stock and there was some dissension among family members and shareholders.
Anyway, nice write up as usual, I will have to check out the new names you mentioned. I have owned VLGEA a few times in the past, but usually at a significant discount to book value.