Investors Chronicle today ..88p+ minimum value call :-)11 May 2020 13:18
There is hidden value in the group’s balance sheet, too. Stratasys has a call option (expiring in December 2022) to buy out the rest of Xaar’s shareholding for $33m (£26.6m). Xaar 3D has net assets of £15m, of which £9.3m is included in Xaar’s equity shareholder funds of £63.9m (88.5p a share).
The bottom line is that, at 55p, Xaar’s market capitalisation of £43m is more than 80 per cent backed by £25.3m net cash and the £9.7m carrying value of the Xaar 3D stake, so you are getting a free ride on a chunk of inventories and property assets (worth over £30m), and a valuable option on Xaar 3D being bought out at £26.6m. As operating losses narrow, and more investors become aware of Xaar’s recovery potential, the 38 per cent share price discount to book value of 88.5p should narrow markedly. Buy.