Saj Karsan submits:
DryClean USA (DCU), soon to be known as EnviroStar (EVI), is a distributor of laundry equipment. This is a tiny company, with a market cap of just $7 million. But for value investors who simply focus on buying businesses that trade at discounts to their intrinsic values (instead of trying to apply small-cap or illiquidity discounts), some of this company’s numbers are appealing.
The company’s market cap is not much higher than its net cash position of $6 million. Often, a stock with a high cash to market cap ratio is one that is a perennial money-loser. But not in this case. Operating income over the last 7 years stands above the company’s current market cap. Demand for heavy-duty equipment has of course waned through this recession, but there are two important attributes of this company that reduce its risk: its customers and its suppliers.