Mestek (MCCK) has a market cap of $535MM.
It has $406MM in cash + investments on its balance sheet. So, cash + investments make up 75% of its market cap.
Also, it has no significant debt (only \~$7MM).
That means the enterprise value of this stock is $136MM.
(EV is how much it would cost you to buy the business outright \[Market Cap - Cash + Debt\]).
Are you with me so far? Here's the best part.
The TTM net income for the company is $82MM. This makes EV/Earnings < 2x.
This is not a melting ice cube. The business is steady (and growing). It has been profitable for over 22 years.
It's in an industry that's unlikely to disappear any time soon. (They manufacture HVAC equipment, architectural products like monumental skylights and louvers, and metal forming machinery.)
Why is it so cheap, then?
Well, there are a few layers to this answer, but first and foremost it is cheap because it's not on the NYSE/NASDAQ but on the OTC market with no analyst coverage.
Also, $166MM of the investments are commodity investments (I think mostly gold), made at the discretion of the CEO.
Some investors don't like this fact, but if you read the CEO's annual letters he says the commodity investments are a hedge against inflation.
They are hoarding cash IMO because the company is waiting to buy up little businesses in adjacent industries and grow them. They've had this kind of roll-up strategy for 50+ years.
The CEO does not believe in dividends because they get taxed twice, so I believe he is waiting instead to find more businesses to buy once they sell at lower prices.
I could go on and on about this company, but let me just end by saying that it is incredibly cheap, given that it's such a solid business. You rarely find companies with this kind of balance sheet. It's ridiculous.
Anyway, let me know what you think.