ALSC – A Microcap Stock with an interesting situation
I recently bought some ALSC stock at $0.23-$0.24 range. Again, this stock intrigues me.
First, ALSC has almost $60 million in Ambac Preferred Shares. These shares are illiquid so ALSC is stuck with these shares and can’t sell it to get it’s money back.
However, it’s suppose to provide a yield of about $0.02/share each quarter. A nice yield, if Ambac stays in business. For those of you who don’t follow Ambac, their ticker symbol is ABK and they’re hurting bad. There’s a real concern that they might not make it through 2011 if financial sector keeps going sour.
Anyways, the reason I like ALSC is because they currently have an absolutely tiny market cap of $8 million. If ALSC can get even 15 cents on the dollar on their Ambac Preferred shares, then I might come out of this investment ahead. If Ambac stays in business, then I’m looking at a 7.5x return on my investment (assuming ALSC can liquidate the shares at face value).
There’s obviously a lot of uncertainty with regards to ABK but this one’s definitely interesting to small/microcap investors…
