The Deep Value Week – 2025/25
Buybacks, New Reports and Business Updates
Market: 4
Companies mentioned:
· Deswell Industries (DSWL) - Reports Fiscal 2025 Results with Higher Net Income and Declares Dividend
· Fonar (FONR) - Announces Board Member Retirement
· Hurco Companies (HURC) - Director’s Share Purchases
· Jerash Holdings (JRSH) - To Dissolve Hong Kong Joint Venture by 2027 & Reports Record FY2025 Revenue of $145.8 Million, Driven by Strong Demand and Strategic Expansion
· Natural Alternatives International (NAII) - Secures Extended Credit Facility with Wells Fargo to Support Growth and Liquidity
· Reko International (REKO) – Further Buybacks
· Tandy Leather (TLF) - To Repurchase 5.1% of Outstanding Shares from Former CEO in $1.3M Deal
· FutureFuel (FF) - Temporarily Idles Biodiesel Production, Cites Regulatory Uncertainty Despite EPA Support
“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.
Deswell Industries (DSWL) - Reports Fiscal 2025 Results with Higher Net Income and Declares Dividend
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On June 18, 2025, Deswell Industries, Inc. (Nasdaq: DSWL) reported its financial results for the second half and full fiscal year ended March 31, 2025. For the full year, net sales declined by 2.5% to $67.6m, while operating income fell to $3.3m (vs $3.8m in FY2024). However, net income rose 44% y/y to $11.1m, driven by a strong $8.0m in non-operating income, including realized gains on marketable securities and higher dividend and interest income. EPS rose to $0.70 (vs $0.48). Cash flow from operations was $13.5m, with no debt and $28.1m in cash as of March 31. A cash dividend of $0.10/share was declared, payable July 17.
Fonar (FONR) - Announces Board Member Retirement
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On June 23, 2025, FONAR Corporation (Nasdaq: FONR) disclosed that Claudette J.V. Chan, a longstanding Board member and the Company’s Secretary, has officially retired from both roles effective June 19, 2025. The company confirmed that her decision was not due to any disagreement regarding FONAR’s operations, policies, or practices.
Hurco Companies (HURC) - Director’s Share Purchases
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In June 2025, three directors of HURC bought shares on the open market. On June 11, G. S. Volovic acquired 7,475 shares at $13.35, amounting to a $99,786 investment and raising his ownership to 2.04%. R. R. Porter followed on June 12 with a purchase of 500 shares at $14.71 for $7,355, bringing his stake to 0.31%. Lastly, on June 13, H. Jamison bought 620 shares at $14.47, totaling $8,968 and representing a 0.16% holding.
Jerash Holdings (JRSH) - To Dissolve Hong Kong Joint Venture by 2027 & Reports Record FY2025 Revenue of $145.8 Million, Driven by Strong Demand and Strategic Expansion
Jerash Holdings (US), Inc. announced on June 20, 2025, that it will terminate its joint venture J&B International Limited, established with P.T. Eratex in 2023 through its subsidiary Treasure Success International. Jerash holds a 51% stake in the Hong Kong-based JV. At a shareholder meeting held on June 16, both parties agreed to dissolve the JV and wind down operations, with final dissolution expected in April 2027. The termination process includes settling outstanding sales orders, collecting receivables, and managing any customer liabilities. The joint venture agreement will end upon the company’s formal dissolution.
Jerash Holdings (NASDAQ: JRSH) announced financial results for Q4 and the full fiscal year ended March 31, 2025, highlighting record annual revenue of $145.8 million, a 24.4% increase from the previous year. Q4 revenue rose 35.6% to $29.3 million despite shipping delays at Israel’s Haifa port. Gross profit surged to $5.2 million in Q4, up from $1.5 million a year earlier, with margins improving from 7.0% to 17.9%. FY2025 net loss narrowed to $0.84m from $2.0m the year before. Jerash anticipates Q1 FY2026 revenue of $38–40m, supported by new strategic orders and a 15% capacity expansion. The company’s balance sheet remains solid, with $15.1m in cash and no long-term debt, and it paid a $0.05 quarterly dividend in June 2025.
Natural Alternatives International (NAII) - Secures Extended Credit Facility with Wells Fargo to Support Growth and Liquidity
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Natural Alternatives International (NASDAQ: NAII) has amended its credit facility with Wells Fargo, reducing the maximum borrowing limit from $12.5m to $10m and extending the maturity to December 31, 2026. The agreement includes use of the Carlsbad powder processing facility as additional collateral and modifies financial covenants to allow more flexibility. Despite past covenant breaches related to profitability and coverage ratios, Wells Fargo waived these defaults and anticipates compliance improvements from Q2 FY2026. Management stated the facility will support working capital needs as the company targets renewed profitability. As of June 19, 2025, $2.4m was drawn on the line of credit and $9.0m remained on the term loan.
Reko International (REKO) – Further Buybacks
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On June 20, 2025, Reko International Group Inc. ($REKO) repurchased and subsequently cancelled 1,500 common shares at $3.70 each.
Tandy Leather (TLF) - To Repurchase 5.1% of Outstanding Shares from Former CEO in $1.3M Deal
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On June 17, 2025, Tandy Leather Factory Inc. ($TLF) entered into a private stock repurchase agreement with Janet Carr, a shareholder and former executive. Under the deal, Tandy will buy back 430,897 common shares—approximately 5.1% of its outstanding stock—at a price of $3.00 per share, totaling $1.29 million. The transaction is expected to close by June 30, 2025. This repurchase is part of the company’s capital allocation strategy and results in a significant reduction in external holdings by a former insider.
FutureFuel (FF) - Temporarily Idles Biodiesel Production, Cites Regulatory Uncertainty Despite EPA Support
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On June 17, 2025, FutureFuel Corp. ($FF) announced it will temporarily idle biodiesel production at its Batesville, Arkansas facility, effective after current contracts conclude in June. The decision follows regulatory uncertainty around the Inflation Reduction Act’s Clean Fuel Producers Tax Credit (45Z), which is intended to replace the expired $1/gallon blenders credit. This move comes despite a proposed EPA mandate increase for biomass-based diesel in 2026–2027. FutureFuel will shift capacity to its specialty chemicals segment and expects new product capacity to go online in mid-2025, with a strong project pipeline for H2 2025 and 2026. The company emphasized that it remains committed to biodiesel and plans to resume production once conditions improve.
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