- SWK Holdings hasn't had a great past couple of years
- Whether you take the company's book value number or substantially haircut it, the stock trades well below book value at today's prices
- There are some early signs that the future could be much brighter for SWK.
SWK Holdings (SWKH; disclosure: long) has floated around the “deep value / NOL” investing community for years. The stock has been written up 4 times on VIC, and if you look deep enough on the internet you can find plenty of other small value investors and bloggers who have looked at it. To date, the stock has been a relative disaster, but it’s possible the company is about to turn a corner.
- Subtract $7.24m from the investment line for Holmdel and add $8m to cash.
- Subtract $38m of cash for the 4 loans made in Q4 and add $38m to the F/R line.
- Value their ~$19m of nonaccrual loans at 50% of face, and value their ~$70m of performing loans and royalty purchases at 95% of face to account for future write offs
- Value their publicly traded shares in HH and CHIX at market value (very small swing)
- Value their deferred tax assets at $0.