For one reason or another, the following companies’ stock prices experienced quite a significant selloff in the past three months. However, a selloff of such magnitude has contributed to a fundamental stock mispricing error, which has pushed the market cap of a company much lower than its current working capital. This phenomenon implies that investors believe the company to be worth less than its current short-term liquidity. This might just be a great bargain for some risk-seeking value investors.
Migao Corp. (TSX: MGO) – $0.81
Agricultural Chemicals
Migao Corporation is a producer of potash-based fertilizers. The Company currently produces two specialty potash-based fertilizers: potassium nitrate and potassium sulphate, for the Chinese agricultural market. These two products comprise 85% of its revenue. The balance comes from the sale of fertilizer manufacturing by-products such as ammonium chloride, a nitrogen-bearing fertilizer, and hydrochloric acid, a chemical with substantial industrial demand.
- Market Cap: $42,472,418
- Working Capital: $151,301,000
- 3 Month Price Change: -17.35%
Catalyst Paper Corp. (TSX: CYT) – $04.00
Paper Products
Catalyst Paper Corporation is a producer of mechanical printing paper in western North America. The Company also produces Northern Bleached Softwood Kraft (NBSK) pulp, which is marketed in Asia. Its customers include retailers, publishers, commercial printers, and manufacturers.
- Market Cap: $58,042,675
- Working Capital: $143,100,000
- 3-Month Price Change: -35.28%
Armtec Infrastructure Inc. (TSX: ARF) – $0.02
Construction Supplies & Fixtures
Armtec Infrastructure Inc. and its subsidiaries, including a jointly controlled entity, is a manufacturer and marketer of a range of infrastructure products and engineered construction solutions for customers in a diverse cross-section of industries that are located in every region of Canada, as well as in selected markets across the world. The Company operates in two principal business unit segments within the construction infrastructure industry: Drainage Solutions (drainage) and Precast Concrete Solutions (Precast).
- Market Cap: $480,533
- Working Capital: $127,189,000
- 3-Month Price Change: -91.49%
Iona Energy Inc. (TSXV: INA) – $0.05
Oil & Gas Exploration and Production
Iona Energy Inc. is a Canada-based oil and gas company that holds five plays in the United Kingdom North Sea-four crude oil development projects, which include Huntington, Orlando, Kells and West Wick, and one natural gas development project namely Trent & Tyne.
- Market Cap: $17,536,412
- Working Capital: $96,200,510
- 3-Month Price Change: -16.67%
Le Chateau Inc. (TSX: CTU.A) – $0.68
Apparel & Accessories Retailers
LE CHATEAU INC is a retailer and manufacturer of fashion apparel, accessories and footwear for women and men of all ages. The Company designs, develops and manufactures its own brand clothing. The Le Chateau brand is sold through its approximately 225 retail locations, of which approximately 224 are located in Canada. In addition, the Company has six stores in the Middle East and Asia.
- Market Cap: $17,254,460
- Working Capital: $93,861,000
- 3-Month Price Change: -10.53%
