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WCRS - Western Capital Resources, Inc.


fishwithwings

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  • 2 years later...

That is good return over two years, hopefully you added along the way.  It had been selling for 4.5 times pre-tax earnings, when there were trades, for over a year. Plus as a full tax payer they stood to benefit from potential corporate tax reduction. 

 

The AlphaGraphics biz was about 40% of pre-tax earnings and they sold it for more than the entire market cap.  More importantly it can change the perception of management from acquirers of so-so businesses to wise allocators. 

 

Assuming $15 million of taxes (?), book value jumps from $3.62 per share to $8.41.  Nearly $5 per share in cash. 

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Any concern that it's under the control of a private equity company?

 

I definitely was concerned about that.  Concerns:

1) it was dumping ground for acquisitions that they could not sell out of the private equity fund.  This deal shows that is far less likely. 

2) it would be managed to extract fees and not for shareholders.  Also shows it is less likely.

3) with a controlling owner there is no recourse to change anything.  Still true, but less of a concern.

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  • 1 year later...

After having a couple of tough quarters due to store closing costs at their Cricket Wireless stores, WCRS posted a strong quarter in March. EPS of $0.11 per share  Stock price under $4.  Net cash of $4.20 per share plus another $3.3 million ($0.35 per share) in escrow to be released in October.  Book value is $6.75 per share.  CFO purchased shares this week at $3.75 and last year at $4.27.  Pays $0.05 quarterly dividend for a 5% yield.

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