IVT - Inventis

[Lizard]

I've followed this micro-cap company for a while, but only just bought a handful at 10cps on todays notice of meeting.

At current price, market cap is $10.3m, but they are about to sell off their technology division to end up with $21.5m in cash. They will be left with their furniture business (contains the old NZX, "Damba Furniture"!) and part of their tech business with total sales around $25m, though won't initially be profitable. However, they'll book close to $5m NPAT on the back of the sale.

They are planning to use up to $10m of the cash on a buyback, with equal opportunity off-market offer for half the shares at post-transaction NTA... at the moment, that looks like around 19cps.

That should leave me with half the shares, close to free-carried in a company that still has $25m of sales and $10m in cash, so I'd be surprised if the remaining market cap is below $5m or 10cps.

[drillfix]

Liz, you have a very special Art of finding things, how you it amazes me.

You must read how many reports per week may I ask?

[Lizard]

Hi Drillfix

I read whatever I have capacity for. Some days that might be a dozen reports and other days one or none.

Often I hunt for shares off a database of share data rather than off forums or analyst reports, so that probably explains why I end up with so many odd bods.

I guess that after reading so many years worth of announcements, I am pretty quick to skim for the bits I'm most interested in.

[drillfix]

Well, you sure do have an eye for it that is for sure.

Hey, when you say you hunt off a database of shares, which database are you referring to, one from your brokers?

[Lizard]

I used to use the subscription Market Analysis one (www.stockmarket.co.nz), but for now I'm using the free download from AFR site and loading into Excel.

[drillfix]

Thanks for that reply Liz, I often wondered what resources an investor like yourself would be using.

Cheers~!

[Lizard]

I was thinking that for a small-time trade, it could be a goer to buy 8000 (max) at 12cps, and try to work it as an unmarketable parcel post-buyback so that directors opt to buyback the entire amount. Would be worth over $500 assuming 12cps entry and 19cps buyback.... worst case, the price goes up and the half left is not an unmarketable parcel any more - but at least then, it should be possible to sell on market at something above or at entry price!

[Lizard]

PS: I should add that there is always a "worse case" than the "worst case" with these things... i.e. the whole transaction suddenly falls through. Though at this point, it seems unlikely. But more disastrous things have happened... it's only ever a spec punt.

[h2so4]

I like it Liz. The sale is virtually a done deal. IVT short-term liabilities will be covered and the company will have no debt. Should the post buy-back share price be much below 10cps say 7cps you can add it to your list of net nets.

[Lizard]

Sale confirmed unconditional. Still need confirmation that the buyback will go ahead for 50% of shares at 19cps, but the few at 10.5cps on the offer still seem like good odds.