I have been following Canam group (CAM) listed on the Toronto Stock Exchange for some period of time. It is an organization with a strong balance sheet and very able management. They seem down to earth and are happily taking advantage of the depressed asset values on there to buy businesses to further expand Canam's capability. In other words, they are taking advantage of their strong balance sheet to buy cheap assets. That is a very value oriented move that invariably will lead to great gains in the future.
I have performed back of the envelope intrinsic value calculations that I am presenting below. I used modest growth prospects (5% per annum over 10 years) and 5 yr average free cash flow and earnings. EDIT: I should clarify that the following NPV calculations assume no growth in cash flow.
Book Value: 391.9M or 8.63/shr
Graham Number: 560M or 12.34/shr
NPV (6%): 358.8M or 7.9/shr
NPV (15%): 265.5M or 5.8/shr
As of this writing, this fine business is selling for 7.5/shr, which gives a decent margin of safety to the valuations.
In addition to selling below book value, Canam offers a decent dividend yield of 2.13%.
Disclosure: I own this business at the time of this writing.
