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Eric Schleien discusses value investing, rational investment analysis, and vital mental models.
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Tuesday Jul 14, 2020
Tuesday Jul 14, 2020
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Video Display (VIDE)
The company does video simulation products and video displays. Simulations for military and aerospace. They’ll also do huge video display units that can be installed in huge rooms like NASA.
5.9m Market Cap
Lots of hair on this company. Lots of liabilities. Made 67,000 last year. And loss-making previous 3 years.
Why does David like it?
2 reasons:
- Price chart hit support and volume dropped off. Accumulation period. People picking up shares in the stock.
- CEO owns 49% of the company. He doesn't want to see the company go under. VIDEO has been around since 1975 which indicates that it has managed to struggle along for all these years. They have divested a lot of their old legacy businesses in 2014. Had expanded over the decades and "diworsified."
Potential Catalysts
Started to move into a new sector - cybersecurity for defense industry. VIDE has a unit that can test computer systems with homeland security - this could potentially be a lucrative business in the future. just finally turned a profit. the future could be better than in the past.
History
VIDE has gone on and off doing well to poor again. The stock goes up a lot when things are good. nobody is paying attention to the company, left for dead. nobody talking about the company on stock boards. Those are the kinds of businesses David likes the most: No sign of life and nobody cares about the company.
Stock Buybacks
VIDE was buying back stock last year in mid-2019.
Other Catalysts
Potential for some kind of change due to a very old board of directors.
About David Flood
David runs the blog, Elementary Value, and is a private value investor based in the UK. His investing approach is grounded in the fundamental precepts of value investing based upon Ben Graham’s core concepts of ‘Intrinsic Value’ and ‘Margin of Safety’. His investment strategy involves looking at both ‘Deep Value and ‘Franchise Value’ situations and using the value investing framework to analyze the financial and corporate facets of a given prospective investment.
Staying In Touch With David Flood
Staying In Touch With Eric Schleien
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