Monday, February 24, 2014

Dacha New And Improved Management

For a few years now, Dacha Strategic Metals (DSM) has languished at a massive discount to its book value, and with good reason. Its previous management was a one-trick pony, having invested the bulk of the firm's assets in rare-earth metals. While this made them look like geniuses in the 2011 rare-earths bubble, the subsequent bursting of that bubble revealed these speculators for what they are: poor capital allocators.

If this same management team were still in charge of Dacha, I would probably not be invested in this company, despite the greater-than-50% discount to book value at which it trades. (Note that the bulk of this book value is made up of cash and a bunch of rare-earth metals valued at current market prices, with no leverage involved.)

Fortunately, however, shareholder activism led to the ousting of the destroyers of capital.Read more...


Anonymous said...

Saj we can't read your articles unless we are a Seeking Alpha Pro member?

Saj Karsan said...

Hi Anon,

I think I posted it too early. Seeking Alpha embargoes some of them for 24 hours, but it should be available now.