Negative Enterprise Value Stocks: Surprising Returns

Avalon Holdings Corporation (AWX)$AEM HOLDINGS LTD(AWX.SI)$

Avalon Holdings Corporation (Avalon) is a subsidiary of American Waste Services, Inc. (AWS). Avalon’s business segments are waste management services, and golf and related operations. The waste management services segment includes waste disposal brokerage and management services, and captive landfill management operations. The golf and related operations segment includes the operation and management of golf courses, fitness centers, dining and banquet facilities, and a travel agency.

Current Price: $2.30

Cash per share: $1.4

Comments: Capital intensive business with extremely tight margins. Safe to say that the margin of safety has probably eroded but waste management is always a business with a moat. Only problem with AWX is that it loses money in the process.

As a going concern, AWX looks to be worth around the $5 mark with a high level of uncertainty.

Mastech Holdings (MHH)

Mastech Holdings, Inc. (Mastech) is a provider of information technology (IT), brokerage operations staffing, and consulting services. It operates five Global Recruiting Centers located in the United States, Asia, and Europe that deliver a range of recruiting and sourcing services.

Current Price: $3.09

Cash per share: $1.56

Comments: Just found out MHH was a spin off from iGATE in Sep of 2008. It was spun off at a price of $9.75 and then plunged to $1.10 within a month as everyone sold off. Will definitely look more into this one

Had a huge run up in price after its first quarter announcement but there may be more value remaining.

Additional Comments

Although there were some more interesting names, many of the larger cap companies have now disappeared from 2 months ago. Who knows where the markets are headed, but it’s always best to scoop up the bargains while they exist and buy more if it gets cheaper.

Disclosure: No positions held at time of writing.

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