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25
Noble Iron wind up nets a 420%+ return for early investors
Posted by: Gerry Wimmer
06/25/2023
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TOP 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 rental companies.

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.

In our 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.

In the 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.

We will 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

Author 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.


Read Disclaimer:

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.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.