One of my favorite investing strategies is the “picks and shovels” approach. If you are a long-time reader of my work, I am sure you will have seen me talk about it before, but for those who don’t know, “picks and shovels” refers to the time of the various gold rushes in America, when thousands flocked to places where gold had been found. Some of the prospectors did hit it big, but most didn’t.
Levered free cash flow of over $76 million, cash on hand of $197 million versus total debt of $64 million, and a current ratio of well over 2 all point to financial soundness. A trailing P/E of below 6, a price/sales ratio of 0.55, and a price/book ratio of right around 1 all indicate the value here, but, as always, there are reasons for those numbers. In this case, it is a poor performance this year.