There may be an arbitrage opportunity with the iron and steel juniors on our list
SmallCapPower | February 10, 2017: U.S. President Donald Trump’s talk of big infrastructure spending has sparked a rally in construction metal related equities, such as copper, steel, and iron ore. Today, we have identified three iron and steel juniors trading at a market capitalization below their Net Asset Value (NAV). NAV is the value of a company’s assets minus any liabilities. Since these companies are technically trading below their book value, there may be an arbitrage opportunity.
Alderon Iron Ore Corp. (TSX: ADV) – $0.55
Iron & Steel
Alderon Iron Ore Corp. is a Canada-based development-stage company engaged in conducting iron ore evaluation activities related to its Canadian properties, which are located in western Labrador in the province of Newfoundland and Labrador (collectively referred to as the Kamistiatusset, or Kami, Property). The Company is focused on developing its asset, the Kami Property, which is located next to the mining towns of Wabush and Labrador City. The Kami Property is surrounded by approximately two producing mines and includes over 305 claims in Labrador for a total of approximately 7,625 hectares.
- Market Cap: $72 million
- Total Revenue (LTM): $0
- YTD Price PCT Change: +74.6%
- Net Asset Value (FY0): $231.5 million
Canam Group Inc. (TSX: CAM) – $8.81
Iron & Steel
Canam Group Inc. is engaged in designing integrated solutions and fabricating products for the North American construction industry. The Company operates through the construction products segment, which includes many complementary goods and services. The Company’s service offer extends from the preconstruction phase to project management, including the erection of structural steel components. It also offers customers an array of complementary services ranging from virtual design and construction to Building Information Modeling (BIM), and the outsourcing of technical drawings.
- Market Cap: $400 million
- Total Revenue (LTM): $1,864 million
- YTD Price PCT Change: -2.3%
- Net Asset Value (FY0): $624.3 million
Empire Industries Ltd. (TSXV: EIL) – $0.40
Iron & Steel
Empire Industries Ltd. designs, fabricates, manufactures, erects and sells engineered products. The Company also provides steel fabrication and installation services to industrial and infrastructure markets, primarily in western Canada. Its segments include Media-based Attractions, Manufactured Products, Steel Fabrication Services and Corporate. The Media-based Attractions segment includes design and manufacture of complex ride systems, telescopes, custom machinery and equipment. The Manufactured Products segment manufactures Hydrovac trucks for excavation service providers to the oil and gas industry and the municipal market. The Steel Fabrication Services segment provides structural steel fabrication and installation, and includes fabrication of tanks, pressure vessels and other specialty carbon and stainless steel products.
- Market Cap: $26 million
- Total Revenue (LTM): $129 million
- YTD Price PCT Change: +19.4%
- Net Asset Value (FY0): $40.4 million
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