Good tech names trading at cash value

2 responses

  1. Tom says:

    One more – even better than the list:
    Enghouse (ESL-TSX), trading BELOW cash, is cash flow postive and pays a dividend.

    Getting a cash generating business for free seems like a decent deal to me.

  2. Greg McLean says:

    If only it were so!

    I’m a burned investor in SW, and they were cash flow positive with almost a negative entity value when I invested. They have since done a dilutive acquisition to spend their cash. We know management wanted the acquisition, but remain dismayed that their board of directors allowed a dilutive acquisition in this market — hence the 30% fall in share price on the announcement.

    The rule: even a boatload of cash on the balance sheet can’t save investors from management making decisions counter to the shareholders’ interests.

    Management and the board can attempt to justify the acquisition all day long — in the end, the market has told them something completely different. Perhaps, it is accretive in two years — see which of today’s shareholders wait for that event.

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