Strike This Is Important To Read.
5 reasons why Orion Equities Is Undervalued By 500% (ASX CODE OEQ)
- Orion own 27.32% of Bentley Capital (ASX BEL). Or 20,513,783 shares. Currently trading at 0.14 Cents this is 2.87 Million. But I think Bentley Capital is cheap.
> Bentley Capital has total net assets of 17.91 Million, But at 0.14 cents has a total Market Cap of 10.4 Million. A 72.21% discount from the market cap. Or a discount from my estimate share price of 0.24 cents.
> Lets look at Bentley Capital on June 30
th each year
June 30
th 2012 Bentley traded at 20.0 million, its assets were 20.5 million a 2.43% discount.
June 30
th 2013 Bentley traded at 18.0 million, its assets were 18.9 million a 4.76% discount.
June 30
th 2014 Bentley traded at 16.8 million, its assets were 17.35 million a 2.43% discount.
Currently Bentley traded at 10.4 million, its assets are 17.91 million a 66% discount!
> Ok lets look at Bentleys Asserts.
Cash $6.77 Million
CBG Australian Equity Fund (Fund management) $5.72 Million
Asx Listed Securities Including Westpac, Nab, BHP $2.99 Million
Strike Resources (SRK =ASX) $2.79 Million
Debt / Liabilities ($0.34) Million
Total $17.91 Million
But this is not the full story. Bentley own $2.79 million in Strike Resources or 36.16% of strike. They purchased this in a takeover in 2015. They purchased at 0.055 cents. However the independent report said that strike is worth between 0.084 cents per share (Low) and 0.137 (high) 14/08/2015. So the strike part of the above assets you can change $2.79 million and insert $4.41 million at the low end and $5.88 million at the high end. So even at the low end of $4.41 million. Bentley now has NOT $17.91 million in assets but $19.53 million. Thus making the 66% discount bigger! Or in my opinion making Bentley conservatively worth around $0.26 per share.
2. Orion own a rental property in WA valued by the company at $1.35 million. Ok but this was purchased in 2006 for $3.6 million. What real estate do you know that has gone in value in this time? I find this very hard to believe that this property is worth anything less than the amount they paid for it. Or perhaps more. Why do they put such a low value on it? We will cover that at the end.
3. They own a non working farm in WA which they have put a value of $2.0 million dollars on. I have no special insight to this but would suggest that this is about right.
4. They have money in a managed fund which is $287,000. And own some shares outright for $68,000. Giving you a total of $355,000.
5.
And finally they own $520,000 in strike resources. Again they have put these shares at a value of $0.048 cents. But if you value them at the low end of the independent experts report then the value comes in at 0.084 cents or a total value of $910,000.
So lets add it all up and see what we get.
Cash $147,000
Bentley at 0.26 cents per share or where I have valued them $5,333,583
WA Farm $2,000,000
Strike At The Low End Of The Independent Report eg 0.084 $910,000
Investment In Managed Funds and Other Shares $355,000
WA Rental Property $3,600,000
Giving you a grand total of $12,345,583
Ok so what is the share price $0.13 cents or to buy the whole company $2.00 Million But if you divide $12.3 million by the shares outstanding 15,634,051 you get $0.78 cents. Or a 500% difference between the purchase price at $0.13 and the break up value of $0.78 cents. Huge upside, little risk. Make up your own mind.
And why have management valued the rental property at $1.35 million vs the purchase price of $3.60 million in 2006. Because in my opinion, the company has been purchasing its own shares in 2015. Better to purchase their shares at $0.13 to $0.20 cents than $0.78.
