Energy services company at 0.5x trailing P/E excluding the 90% of market cap in net cash.

Consistently profitable, 5x P/E including the 90% of market cap in net cash.

Investment Thesis:

This consistently profitable micro-cap has 90% of the market cap in net cash. If we subtract the cash, it is trading at only 0.5x P/E, or 0.5x EV/EBITDA. The net cash gives excellent downside protection. About 100% of earnings convert into free cash flow at 25% operating margins. Returns will come either a market re-rating and/or continued positive earning performance: e.g. if the market put a 7x P/E multiple on the business and rated the cash on the balance sheet at half its worth: this alone would give a 70% return. In addition, there is a return of 15%-20% a year from ongoing profits if they stay stable. The company is…