Mr Deep-Value

I find cheap stocks to beat the market. Read all the best ones in my newsletter. Link below.

[Mr Deep-Value @mr_deepvalue]

I used to acquire SME businesses in the real world. Negotiations, due diligence, managing people. It didn’t scale.

Now I buy businesses with a click.

I focus on deep value and special situations full time, compounding my own capital. UK nano caps, off-market deals, controlling stakes where possible.

I’m looking to connect with investors doing the same. There’s a lot of neglected opportunity in the small end of the market.

[Mr Deep-Value @mr_deepvalue]

The market is valuing this business as though it's already dead.

At today's price, you're buying the company for roughly 0.6x tangible book value.

The market cap is ¥12.4b.

The balance sheet holds over ¥21b of conservatively calculated real-world tangible assets.

Meanwhile, the operating business keeps generating cash.

Revenue has grown from ¥11.6b to ¥14.8b over the last five years.

Operating margins have nearly tripled.

Owner-adjusted FCF is roughly ¥900m annually.

After backing out cash and securities, the operating business can be acquired for less than 4x FCF.

Yet the market continues pricing it like a melting ice cube.

The funny part?

The company owns decades-old industrial land carried at historical cost, billions in productive manufacturing assets, no controlling shareholder, and an activist has already started building a position.

The market sees a dying industry.

The financial statements show a profitable exporter, growing revenues, accumulating cash, and trading at a 41% discount to tangible asset value.

Sometimes deep value really is this simple.

[Mr Deep-Value @mr_deepvalue]

@andrew1corpora1 Good point

[Mr Deep-Value @mr_deepvalue]

Just got the best stock idea of my life from a retired engineer in a village pub outside Birmingham. Three ales in he tells me his nephew runs a factory for a listed company I've never heard of. Market cap £80m. Net cash covers most of it. Trades at 4x earnings. Makes an unglamorous component that ends up in products all over Britain. No analysts. No institutions. No story. Family owns 42%. I am going to buy this with both hands. The best DD on earth is being the only person at the bar who cares what the company is called.

[Mr Deep-Value @mr_deepvalue]

@John_Hempton Welcome John. It's lovely to have you join us.

[Mr Deep-Value @mr_deepvalue]

I don't need alcohol to buy completely worthless shares.

It's how I make my living....

[Lucy @BurnetRose08]

@mr_deepvalue To be honest, it sounds as though you bought a completely worthless share on a whim after having a few drinks

[Mr Deep-Value @mr_deepvalue]

Michael Saylor is a bit of a character.

[Mr Deep-Value @mr_deepvalue]

@dodgingalpha This tells me more about you than it does about me

[Mr Deep-Value @mr_deepvalue]

I was recently invited to a fund manager dinner. I’m not a fund manager. The organiser happened to enjoy my Substack. The combined AUM around the table was somewhere around £5bn.

It was fascinating. Everyone had impressive credentials. Elite universities. Institutional backgrounds. Decades at respected firms. At one point somebody asked me how I got the capital to become a full-time investor. I explained that I’d spent years starting, building, acquiring and selling businesses. The profits eventually became investment capital.

He stopped me. As if I had misunderstood the question. “No,” he said. “How did you get the capital for the first business?” I told him I sold things to people. They gave me money. I used that money to buy more things and sell more things. Then I repeated the process for twenty years. He stared at me. Genuinely confused. As though I’d described a previously undiscovered asset class.

That was probably the moment I realised there are two completely different worlds of finance. One world starts with capital. The other figures out how to create it.

[Mr Deep-Value @mr_deepvalue]

The market gives small investors an extraordinary gift. Most of them refuse to use it. A £50bn fund cannot buy a £100m company. A sovereign wealth fund cannot spend six months researching a stock that would represent 0.01% of its portfolio. A pension fund cannot build a meaningful position in a business trading £30k of stock per day.

You can.

The inefficiency isn't hidden. The inefficiency is that the largest investors in the world are structurally prevented from looking where the best bargains often exist. And retail investors use that advantage to buy the same seven stocks as everybody else.

[Mr Deep-Value @mr_deepvalue]

@icelynjennings We surely can't lose here 😅

[Mr Deep-Value @mr_deepvalue]

The company has released 87 slides. I understood three words. There were, however, multiple green arrows heading upwards. I've completed my due diligence.

[Mr Deep-Value @mr_deepvalue]

Good businesses priced like they're about to die, offer genuinely massive upside for virtually no downside risk...

[Mr Deep-Value @mr_deepvalue]

Victoria's Secret $VSCO is currently trading at a P/FCF ratio of just 3.75.

[Mr Deep-Value @mr_deepvalue]

One of the strangest things about Japanese equities is how many companies keep compounding quietly while the stock market behaves like nobody read the annual report.

Forval Telecom:

• ¥63.5B revenue
• ¥3.4B net income
• 29 straight years of dividend growth
• recurring telecom and cloud revenues
• strong SME customer base

Market value:
~¥22B.

That's roughly:
• 6.5x earnings
• 0.35x revenue

The company has increased its dividend every year since many investors were still using dial-up internet.

The stock still trades like it's waiting for permission to exist.

[Mr Deep-Value @mr_deepvalue]

One of the strangest things in markets is how quickly investors mentally liquidate cyclical businesses even while the cash machine is still running.

Scorpio Tankers:

• 2025 adjusted earnings: $269.5M
• Q1 2026 adjusted earnings: $150.9M
• Q1 adjusted EBITDA: $214.1M
• $100M stock repurchase in April alone
• quarterly dividend: $0.45/share
• average debt down from $979M to $616M YoY

The stock market hears:
“tankers.”

An owner hears:
“we just bought back $100M of stock after generating another $214M of EBITDA in one quarter.”

[Mr Deep-Value @mr_deepvalue]

There’s a Japanese online platform company quietly compounding while the market mostly ignores it.

Latest FY2026 results:

• revenue: ¥29.2B (+14.8%)
• EBITDA: ¥7.6B (+7.2%)
• operating profit: ¥5.9B (+4.5%)
• net income: ¥4.16B (+7.3%)
• cash: ¥12.7B
• ROE: 19.6%

Next year guidance:
• revenue: ¥33.5B (+14.6%)
• operating profit: ¥6.43B (+8.8%)

Market cap:
~¥47B.

The market is valuing a double-digit growing, highly profitable platform business like this because it lives in Japan and nobody is paying attention.

[Mr Deep-Value @mr_deepvalue]

This one is now up...

[Mr Deep-Value @mr_deepvalue]

The market is offering you a company for £61m. The company has already secured £170m of future contracted payments. A royalty stream runs for another 17 years. An industry insider paid £1.10 per share for a stake. The stock sits at 83p. Apparently the market believes the people who wrote the cheque know less than the people selling the stock.

[Mr Deep-Value @mr_deepvalue]

@ThomasMoroder You're correct.

My point was merely to illustrate that real businesses are being bought, in the real world for absurd valuations.

These are the kind of deals I want to be doing.

This particular selection is the tip of the iceberg of what I've seen over the years.

[Mr Deep-Value @mr_deepvalue]

My long-term goal is to build my capital base until I’m able to buy shares with the intention of exerting influence, taking control, or delisting the entire thing.

Armchair investors are always eager to tell me that that type of thing is impossible, or that cheap businesses are just value traps.

Fortunately, I follow the UK RNS feed, and similar feeds across global exchanges.

Here are a few things I’ve seen in the last few months alone:

Walker Crips is a 100 year-old UK wealth management platform with almost £3b AUM, and £30m in annual revenue ,and almost £10m in net-cash.

They were delisted for just £6m.

An existing shareholder (Philip Capital) moved in and took the whole thing private.

Paying less than net-cash means they got a 100 year old brand, full FCA regulatory permissions, client relationships, and all future cash flows for free.

===

Cliq Digital is a digital content and performance marketing company from Germany, with revenues of around €150m, €30m in net-cash, and €15m-€20m in annual FCF.

A buyer quietly accumulated a 40% stake, aligned with the management team, and agreed to delist for roughly €20m.

They used the company’s money instead of their own and received €10m in net-cash and the operating business for free.

===

OPG Power is a power-station business based in India, and formerly listed in the UK.

The business generates around £20m in annual FCF and also has a similar amount of net-cash.

The founding family already controlled 50%, and the stock price went into a death spiral.

They decided to delist the whole thing, also using company money rather than their own, for just £25m.

They basically paid 1x FCF for a power station, supplying one of the world's fastest growing economies.

All because the stock market gave it to them.

===

These are the kind of deals I see happening all the time.

These are the kind of deals that inspire my long-term approach, and short-term stock selection process.

If you think like a business minded person and want to buy stocks in this way, you’ll probably enjoy my newsletter.

I publish a couple of new ideas every week.

The next idea will be published tomorrow.

[Mr Deep-Value @mr_deepvalue]

@HuuuMeee I double my money every 3 years (roughly)

[Mr Deep-Value @mr_deepvalue]

@walter_schloss I actually wrote this one up a few months ago. Great business...