Yesterday I wrote about 'the one that got away', so today I'll write a little bit about one that hasn't:
Avesco.
I picked up the majority of my holding in Avesco for prices between 20p-30p. The current share price is £1.05, and whilst it has "multibagged" already, I haven't sold a single share in the company.
In my opinion, the financial crisis and consequent fallout when some share prices fell to rock bottom, provided perhaps the opportunity of a lifetime for savvy investors.
Avesco has a global presence, a strong balance sheet with a tangible net asset value of £1.43 per share, it is now trading profitably and is highly cash generative. They also recently resumed dividend payments.
Whilst the company have indicated that 2011 will be a solid year, 2012 is the year in which they should excel (London Olympics, European Football Championships).
In the background is the possible payout from Disney which could amount to as much as £1.80ish per share.
Currently then at £1.05 per share, you would be buying a £1 worth of fixed assets for 73p and you might get £1.80 for every £1 you invest (if Disney lose their appeal).
Bizarre though it sounds, potentially you could get £1.43 of tangible assets and a profitable, cash-generative, dividend paying business for about minus 75p!!
I have to add that I didn't invest in Avesco because of the Disney case. In fact, I knew nothing about it until Simon Cawkwell brought it to the attention of investors via the ADVFN bulletin board.
My point here is that regardless of the eventual Disney outcome, I believe that the Avesco recovery has only just started, and you'd be hard pressed to find another company as cheap as this one, even after a 5-fold increase in the share price from it's nadir.
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