The Shares Researcher

Intro RBG is a legal services firm based in the UK. Historically, the company had four divisions with a focus on: a) disputes, b) advisory services, c) sell-side corporate finance and d) litigation finance. RBG has shown a strong performance in the past years in the first two divisions, a decent but more volatile performance for the sell-side corporate finance boutique and a very weak performance in the litigation finanRBGce segment. Hence, the new management decided to exit litigation finance and was able to sell part of this segment in mid-July. Shortly thereafter, a further impairment was booked, the dividend suspended, and the focus is now on restructuring the existing business and paying down debt. Due to the above challenges, the market cap has decreased from more than £150m in 2021 to approx. £17m.   Valuation The legal services (disputes and advisory) and professional services (sell-side corporate finance) have shown revenue figures of £42m in 2021 and £50m in 2...

Intro Today, I’ll write about a special situation, which is not aimed for all investors – a good old net-net stock as defined by Benjamin Graham. Hunting plc is a British supplier to the oil and gas industry and hence has a highly cyclical business: Revenues more than doubled from 2016 to 2019 while EPS grew to almost £0.44 in 2019. After the sharp decline of the oil price at the beginning of 2020, revenue declined significantly and the stock price is down from more than £9 in May 2018 to approx. £1.4 at the moment. Although the outlook is not rosy for the industry, it might still be worth to have a look at this company from a contrarian perspective, especially taking into consideration its solid balance sheet and its ability to weather also wild storms.   Valuation A net-net stock is a company whose cash plus accounts receivable plus inventories minus all liabilities is higher than its market capitalisation. So let’s look at the H1 2020 figures (all numbers in £ million)...