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Holders Technology – Plenty of assets, shame about the business

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Holders Technology (LSE:HDT) has a market capitalisation of only £1m but a net current asset value, NCAV, of £3.21m. There is no debt and £0.44m of cash.

To calculate NCAV we add up the current assets and deduct all the liabilities (current and non-current), but we ignore any value in non-current assets.

To be strict, according to Benjamin Graham, we should deduct one-third of inventory and one-fifth of receivables. When we do this for Holders Tech the NCAV falls to £2m – still double MCap.

Balance sheets

£m     November 2012 2013 2014 2015
Property, plant and equipment 0.40 0.32 0.27 0.33
         
Inventory 3.14 2.80 2.74 2.53
Receivables 2.40 1.93 1.95 1.56
Cash 0.70 1.29 0.63 0.44
Other current assets 0.06 0.03 0.07 0.06
Deduct current liabilities -1.59 -1.45 -1.31 -1.19
Deduct all long term liabilities -0.26 -0.23 -0.22 -0.19
NET CURRENT ASSET VALUE 4.45 4.37 3.86 3.21
         
Net asset value 5.20 5.05 4.49 3.87
Per share NCAV     98.0p 81.5p
Per share NAV     114p 98.2p

The reasons for the low share price (24p-28p) are:

  1. The bad industry economics of the two chosen sectors – see Newsletters dated 4th – 10th Nov 2014, 23rd – 24th Feb 15 and 28th April 2015 and 17th – 19th August 2015 outlining Holders’ strategic position in poor industries.

The Chairman commented on the division ……………..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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