written by reader Mako and other earnings

By digitaldeity, August 19, 2012

Hi Travis,

Have you revisited Mako now that it’s disappointed earnings twice in a row? The once darlings of Motely Fools having dropped tremendously since it’s 45$ high.
Also any thoughts on CVV and SILU recent earnings? I noticed that CVV’s backlog had dropped 37%, and your analysis focuses quite a bit on the backlog from previous articles.


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Travis Johnson, Stock Gumshoe
August 20, 2012 2:02 pm

No, I haven’t yet. CVV is on my list to look at again now — SILU is still moving along the track they’ve kept at for the past year, though I thought they would move more quickly in this environment. Core interest income is growing nicely, but they had some writedowns as they continue to monetize legacy real estate assets that aren’t worth quite as much as they thought. Still at a discount to book value and a 4%+ yield that I still think will grow substantially in time, I’ve just been too optimistic on the timeline for this one. They have about $130 million in oustanding resource-related loans now and more than $90 million in cash, so plenty of room to grow with more loans and they should be clearing their last big real estate asset off the books soon, it is reportedly under contract so I hope that contract holds and it goes through this year.

Other than short term fluctuation and the fact that they’re slower than I expected, the overriding concern about SILU should be broad commodity risk and whether or not you think they’re going to operate effectively — lending to the right miners, with the right collateral, at profitable rates. Given their expertise, I think they’ll continue to get this right … but if commodities collapse en masse their borrowers will all be in trouble at the same time, which likely means the shares would trade at a steep discount to book value. Currently trades for about 90% of book, I think it ought to trade at a small premium to book right now.

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Travis Johnson, Stock Gumshoe
August 21, 2012 11:33 am

Shares some updated CVV thoughts today here, FYI: http://stockgumshoe.com/2012/08/checking-up-on-cvd-equipment/

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