IDEAS: Total cash distributions to Noble Iron Inc.’s (TSXV: NIR.H) shareholders
will amount to over C$1.30 per share.
Usually, when a micro cap
company announces a Special Meeting to seek the approval to wind up its
operations, it doesn't result in a good outcome for its shareholders. That is
clearly not the case for shareholders of Noble Iron Inc.
The Investorfile blog first
recommended shares of Noble Iron Inc. (TSXV: NIR.H - C$0.29) as an undiscovered
small cap value investment opportunity in February 2021. At that time, the
stock was trading at a price of C$0.25. (See: Noble
Iron is an attractively valued SaaS company with cash). But, since our
initial recommendation, a lot has happened with the Company, which was - and
still is - good news for its shareholders.
At the beginning, Investorfile
was attracted to Noble Iron Inc. due to its financial strength and how the
Company was scaling its Software-as-a-Service (SaaS) business through its
wholly owned subsidiary Texada Software, based in Guelph, Ontario.
Texada offered cloud software solutions for the business operations of equipment
Then, last year, the value of
Texada’s SaaS business caught the attention of a United States-based private equity fund with a buy-out offer and the Noble Iron subsidiary was ultimately sold for about C$37.2
million in cash.
last blog post about the company (See: For shareholders of Noble Iron there is
still money on the table), we noted from a Management Discussion and Analysis
(MD&A) disclosure that the Company was assessing options to return capital
to its shareholders after the Texada divesture. At that time, Noble Iron’s
balance sheet indicated that the Company had a working capital balance in cash,
which significantly exceeded the then-current stock price of C$0.90. Based on
that share price, Investorfile was of the opinion that there was still more
upside opportunity for shareholders and potential investors.
Today, that upside is being
realized. First, in December of 2022, Noble Iron’s shareholders approved a
C$1.00 cash distribution, which was paid out last year. Then, last week the
Company announced a Special Meeting to seek shareholder approval for the
winding up of its operations and voluntary liquidation, which would see a
minimum initial payment of C$0.30 per share as a return of capital paid to
shareholders (once approved on July 12). Further cash distribution could be
made once all outstanding liabilities/expenses from the wind up are settled.
past we acknowledged Noble Iron was a very under-promoted micro cap public company
and, as such, its divesture of Texada went largely unnoticed. But, as a Top
Idea of Investorfile’s, early investors in Noble Iron stand to gain in excess
of a 420% return from the combined total of cash distributions since we first
recommended this stock. This investment idea proved to be a big winner despite
the lack of discovery by the general small cap investment community.
look forward to the completion of Noble Iron’s wind up and any additional cash
distribution tidbits beyond the initial payment from the wind up that could pad
investor gains even more so.
Noble Iron Inc. has approximately 27.2
million shares outstanding, fully diluted.
Company website: www.nobleiron.com
Ownership Disclosure: TSXV: NIR.H – Yes
Investorfile's share price accumulation target of C$0.60 for Noble
Iron Inc. was initially reached at the market close on February 8, 2021.
This article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering
of investment advice. Those seeking direct investment advice, should consult a
qualified, registered, investment professional. This is not a direct or implied
solicitation to buy or sell securities. Readers are advised to conduct their
own due diligence prior to considering buying or selling any stock.
Investorfile.com is not engaged in an investor relations agreement with Noble Iron Inc. nor has it received any
compensation from Noble Iron Inc. for the
preparation or distribution of this article.
The author of this article has acquired and may trade shares of Noble Iron Inc. through open market
transactions and for investment purposes only.