Counsel RB Capital: P/B Under 0.9 & Strong International Growth=Buy?

Counsel RB Capital: P/B Under 0.9 & Strong International Growth=Buy?

Counsel RB Capital Inc.


Michael Mauboussin: Here’s what active managers can do

michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalkThe debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More

Counsel RB Capital Inc (PINK:CRBN) was founded in 1983 and is based in Toronto, Canada. The Company helps its customers dispose of distressed and surplus capital assets. The Company arranges asset disposition sales, including liquidation and auction sales. Counsel also acquires manufacturing facilities and used industrial equipment and machinery. Counsel RB Capital Inc. is a subsidiary of Counsel Corporation. Counsel RB Capital Inc (PINK:CRBN) engages in the distressed capital assets transactions. The company is involved in the finding, acquiring, and monetizing distressed and surplus capital assets, including turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, accounts receivable portfolios, real estate, distressed debt, and related intellectual property. It also arranges traditional asset disposition sales, such as on-site and Webcast auctions, liquidations, and negotiated sales. In addition, the company owns and licenses patents in voice over Internet protocol architecture and conferencing technologies.

Stock Snapshot:

The stock for Counsel RB Capital Inc (PINK:CRBN) stood at USD 1.43 representing a market capitalization of USD 40.27 million. Over the last year, the stock has traded between a range of USD 0.28 and USD 2.80. RB Capital Inc (PINK:CRBN) has witnessed an average volume of 2,102 shares over the last three months. The stock has been trading at a P/E ratio of 1.49, a P/S ratio of 3.46, and a P/B ratio of 0.87. The Company has 29.16 million shares outstanding, with a float of 2.40 million.

Competitor Analysis:

Great American Group, Inc. (OTC:GAMR) offers asset appraisal and divestment services. The Company assists with store closings, inventory sales, and strategic dispositions, auctions surplus machinery and industrial equipment, buys, sells, and auctions surplus and under-performing wholesale inventory, conducts appraisals for asset-based lenders, real estate acquisitions and dispositions. The stock for the Company stood at USD 0.351, with a total market capitalization of USD 10.53 million. The stock has been trading at a P/S ratio of 0.1276.
KAR Auction Services Inc (NYSE:KAR) provides wholesale vehicle auction services in North America. KAR Auction Services Inc (NYSE:KAR) facilitates a marketplace, providing auction services for sellers of used and salvage vehicles through physical auction locations and multiple proprietary Internet websites.  The stock for the Company stood at USD 20, with a total market capitalization of USD 2,729.35 million. The stock has been trading at a P/S ratio of 1.429 and a P/B ratio of 1.9375.
Premier Exhibitions, Inc. (NASDAQ:PRXI) is in the business of developing and touring museum exhibitions throughout the world. Premier Exhibitions, Inc. (NASDAQ:PRXI) primarily produces educational exhibitions. The stock for the Company stood at USD 2.71, with a total market capitalization of USD 130.13 million. The stock has been trading at a P/S ratio of 3.35 and a P/B ratio of 6.6.

Financial Analysis:


For 6MFY12, the company reported total asset liquidiation revenue of USD 6.86 million, which was almost half of the asset liquidation revenue of USD 12.46 million; representing a YoY decrease of 44.9%.

Operating Income:

For 6MFY12, the Company reported USD.47 million as compared to operating income of USD 4.18 million for the corresponding period last year.


For 6M FY12, the Company reported a net loss of .031 million, as compared to a profit of USD 3.7 million in the corresponding period last year. The Company reported earnings per share of $0 for 6MFY12, as compared to USD 0.14 for the corresponding period last year.

Financial Position:

The Company reported a cash balance of USD 6.63 million as at June 30, 2012. The Company had cash value per share of USD 0.24. Total debt stood at USD 3.65 million, resulting in a debt to equity ratio of 7.87.

Factors to Watch Out For:

Expansion Strategy:

  • Expansion in Europe with new European-based offices in the UK, Germany, and Spain.
  • In recent months, Counsel RB and Heritage jointly launched a successful expansion into Latin America, including Mexico, and in 2011 Counsel RB opened a business development office in Canada.