Well, it’s certainly been a while since my last blurb, so it is my hope, first, to formally let readers know that I have intentionally decided to cease posting indefinitely after this post for a variety of reasons, not least of which have to do with compliance constraints as they relate to my forthcoming employment. I would like to thank everyone for their loyal readership and support, and inform you that I will leave the site up for posterity for at least the foreseeable future.

That said, hopefully I can leave you with one final stock pick that might prove intelligent and wallet-fattening.

Monarch Services (MAHI.PK) is a tiny company which has recently sold all of its operating subsidiaries and currently sits on a pile of cash and a notable chunk of acreage in Maryland that is significantly greater than its current share price. MAHI has around $1.6 million in cash (~$1.00/share) and a 14.7 acre parcel of land in Phoenix, MD on the asset side of the balance sheet. Vacant acreage in the area appears to sell for around $100,000 per acre, which would value this unsold land parcel at nearly $1.5 million. Thus, with around just $500K in payables, the company has a net asset value of some $2.6 million, or $1.60/share.

For the record, this entirely discounts the $900K receivable from the buyer of one of the company’s recently sold subsidiaries, Girl’s Life Magazine, which is currently overdue and may prove in default. If that is the case, though, the company re-inherits the business, which served as collateral for the loan extended to the purchaser. Thus, assuming that $900K valuation is reasonable, net asset value may actually approach $2.20/share. As of today, shares are trading at a mouth-watering $0.64.

In any case, of course, the stock is not without its risks. First, management has announced no plans for the future. This means, then, that they may well choose to burn cash on ill-conceived acquisitions or new business ventures. It also means that there is no real time-frame for the realization of intrinsic value. Second, the company may not be able to sell the parcel of land for anything close to $1.5 million, in which case net asset value will prove substantially lower than reported. Last, but not least, liquidity (and getting shares in the first place) should be any shareholder’s concern. With a market cap of $780K, the stock trades quite infrequently and bid-ask spreads can be large. Nonetheless, the enormous margin of safety should more than compensate investors for these risks, and the stock appears by any measure cheap.

So, with that final nugget, I sign off from JoeCit.com for good. Thanks again to everyone for their support. I hope reading this site has been even half as fun and rewarding for you as it has for me.

Regards,

Joe Citarrella

Disclosure: I own shares of MAHI