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I am surprised there hasn't been an idea tossed out yet.

So let me toss a name out - Innovate Corp (ticker: VATE)
Used to be a more complex entity with additional subsidiaries, including an insurance entity.
The company has slimmed down a lot, and now comprises three subsidiary segments
1. Infrastructure - Own a majority stake in DBM Group, largest steel fabrication company in the US.
2. Broadcasting - own over 200 OTA (Over-the-Air) TV stations
3. Life Sciences - Grouped together as Pansend, and includes stakes in small innovative healthcare companies

- The Infrastructure segment does the heavy lifting, and supplies most of VATE's revenue.
- Broadcasting should be doing better. Lousy revenue generation - a Michael Dell-backed entity showed some interest some time back, but then lost interest.
- The Life sciences segment has potential. But, does VATE have the resources to properly grow this segment?

Quick summary: Asset rich, cash poor, weak management (@ corporate level)
Big insider is Avram Glazer (Yes, the Glazer family of Tampa Bay Bucs & Manchester United fame)

Home page:
https://innovatecorp.com/

HohumYNWA

For just some reference, in my "guesstimates"
Infrastructure $200M - $400M
Broadcasting $50M - $80M
Life sciences $125M - $250M
or $375M - $730M

A fundie website I trust says this of VATE.

- Earnings have declined by 29.1% per year over the past 5 years.
- Has less than 1 year of cash runway.
- Highly volatile share price over the past 3 months.
- Negative shareholder equity.

Those sorts of "red flags" spell 'PASS' for me, especially when a price chart suggests that VATE has done nothing but track the broad market since Fall of '21.

@ CharlieBonds,

Don't disagree with the perspective, or the points. As I said in the OP, weak management (at the corporate level)
That includes poor outcomes with the sale of some subsidiaries

That said, VATE sold off sharply the second half of 2022, before share price started turning around.
Up over 20% in 2023.

HoHum,

Everyone will have their own way of doing things. If you want to buy VATE, go for it.

Me? I wouldn't give it a second thought, because it fails my fundamental and technical screens.

Yup, had a bigger VATE position prior and still have a VATE position.

Over the years, some HCHC (prior ticker) or VATE gains and losses - so no illusions that HCHC/VATE is a risky investment.

HoHum,

It's not VATE's "riskiness" that I was objecting to, but something else, namely, my unwillingness to try to manage its risks.

As I've said elsewhere, I buy across the yield-curve and up and down the FI credit-spectrum. That means I'm buying spec-grade debt (aka, junk bonds), a lot of them. However, when I'm buying those bonds, I'm typically buying "fallen angels", i.e., the debt of companies with fairly decent balance sheets that the market is currently trashing, but whose prospects for recovery are likely enough that I'm willing to take a position.

Some of those bets worked out fabulously. E.g., buy XRX's 8's of '27 at 34 and have the bond trade near par a couple years later. You've doubled your money on the principal, and --meanwhile-- clip a 25%/year coupon. Same-same with Internet Cap's bonds, another one on which I achieved a near 100% YTM. OTOH, there have been bets on which I lost everything. No BK workout. No nothing. However, as long as gains exceed losses by a decent enough margin, the gig is doable.

You presented VATE a 'microcap'. But that's an irrelevant fact. What is relevant is that the market --in her infinite wisdom-- is pricing it as a 'penny stock'. Therefore, VATE needs to be benchmarked against its peers, the couple thousand other penny stocks there are, all of which can offer fabulous gains, as well as spectacular losses. So, this question has to be asked:

Ques: "Who makes consistent money in penny stocks?"
ANS: "Them who make penny stocks their specialty and who do the work that investing in that asset class requires."

I've dabbled in the pennies, as have we all. But I've already got more iron in the fires than would permit me to add another. So VATE gets discarded for being the distraction it would be for me, rather than an opportunity.

Charlie

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