Barnwell Industries, Inc. (AMEX:BRN) has filed its September 10Q and the results are encouraging. Even though the stock is up more than 40% since our first post, we believe that BRN is still undervalued and so we are maintaining our position.
We started following BRN because its liquidation value of $55M (around $6.52 per share) was some 86% higher than its market capitalization of $29M based on its November 28, 2008 close of $3.51. Dr. Eric Jackson’s Ironfire Capital LLC had launched a “‘friendly’ activist campaign targeting the company to unlock shareholder value”.
BRN has now filed its September 10Q and we believe that its liquidating value has increased from our original estimate of $6.52 per share to $6.91 per share, which is some 40% higher than its Friday close of $4.95. Set out below is our summary analysis of the balance sheet (each “Carrying” column shows the assets as they are carried in the financial statements, and each “Liquidating” column shows our estimate of the value of the assets in a liquidation):
Although the stock has risen substantially, at 72% of its written down value, BRN is still cheap and we are maintaining our position.
[Disclosure: We do not presently have a holding in BRN. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.]