The difference between a company’s book value and its tangible book value is that goodwill and other intangible assets (patents, licenses, etc.) are subtracted out. A company selling below this value would generally imply that a company’s tangible assets are being heavily undervalued, with the expectation for a low return. However, the companies on our list today have delivered an ROA above 12%, while also providing positive cash flows for their investors.
Nevsun Resources Ltd. (TSX: NSU) – $3.92
Gold
Nevsun Resources Ltd. (Nevsun) is engaged in the acquisition, exploration, development and operation of mineral property interests. The Company’s principal mining operation is the Bisha Mine and the Company’s principal mineral property is the Bisha property, which is owned by Bisha Mining Share Company (BMSC). Nevsun has a 60% interest in BMSC. Bisha is a volcanogenic massive sulphide (VMS) gold, copper and zinc deposit located 150 kilometers west of Asmara, Eritrea, East Africa.
- Market Cap: $804,447,828
- Price/Tangible Book Value: 0.89x
- ROA (2014): 17.9%
- Free Cash Flow (2014): $136,909,997
Alacer Gold Corp. (TSX: ASR) – $2.67
Gold
Alacer Gold Corp. is a United States-based intermediate gold mining company engaged in mining, development, exploration and production of mineral deposits in Turkey. The Company owns an 80% interest in the Copler Gold Mine, which is an epithermal gold-silver-copper deposit, centered on a composite diorite to monzonite porphyry stock. The Company also holds exploration licenses surrounding the Copler deposit covering a 15 kilometers by 25 kilometers area.
- Market Cap: $793,687,536
- Price/Tangible Book Value: 0.97x
- ROA (2014): 12.1%
- Free Cash Flow (2014): $118,027,262
Petrolia Inc. (TSXV: PEA) – $0.38
Oil & Gas Exploration and Production
Petrolia Inc. is a Canada-based oil and gas exploration company engaged in the exploration and development under oil and gas exploration licenses. The Company’s projects include the Bourque project, Haldimand Project and Anticosti project, among others.
- Market Cap: $28,694,225
- Price/Tangible Book Value: 0.42x
- ROA (2014): 25.6%
- Free Cash Flow (2014): $17,491,400
Automodular Corp. (TSX: AM) – $2.33
Auto, Truck & Motorcycle Parts
Automodular Corporation is a Canada-based sequencer and sub-assembler of components and modules that are installed in cars and trucks made by North American Original Equipment Manufacturers (OEMs). The Company’s products include instrument panel, rear suspension, front corner, front center suspension, front strut and bolster. Automodular also manufactures complex sub-assemblies such as cockpits, suspension units and powerpacks.
- Market Cap: $44,857,704
- Price/Tangible Book Value: 0.86x
- ROA (2014): 23.0%
- Free Cash Flow (2014): $15,694,000
Almonty Industries Inc. (TSXV: AII) – $0.82
Specialty Mining & Metals
Almonty Industries Inc. is engaged in the production of tungsten concentrate and the advancement of exploration and development activities at the Los Santos Project. The Los Santos Project is a tungsten mine located approximately 50 kilometers from Salamanca, in western Spain. The Panasqueira Mine is located in Panasqueira, Portugal. The Valtreixal project is located in northwestern Spain. The Company also operates the Wolfram Camp Mine.
- Market Cap: $42,439,930
- Price/Tangible Book Value: 0.94x
- ROA (2014): 16.0%
- Free Cash Flow (2014): $6,383,000
