Asta Funding (ASFI) announced today the results of the 2012 fiscal year. While the share price has gone up a bit since I initiated my position (just ~10%) I think the company is actually cheaper today than a year ago. The following quote from the CEO illustrates nicely how much value was realized last year:
Mr. Stern continued, “At September 30, 2012 our cash and cash equivalents and investments totaled $106.3 million as compared to $106.9 million at September 30, 2011. During the fiscal year 2012 we invested over $20 million in personal injury claims and repurchased over $16 million of Asta Funding, Inc. shares.
So what we see is that the cash balance has basically remained constant last year implying that the company managed to generate ~$36 million in free cash flow. Combine the free cash flow and the cash on the balance sheet with the current market cap ($120 million) and I think it should be quite obvious that Asta Funding is still very undervalued. Given the aggressive share repurchases that’s actually great news for me!
In the category “who the hell cares?”:
In addition, I am announcing that the Board of Directors of Asta Funding, Inc. has approved the payment of the 2013 annual dividend totaling $0.08 per share, payable to shareholders of record on December 24, 2012 and payable on December 31, 2012. The special dividend reflects the confidence of the Board of Directors in the strong cash position and the Company’s solid balance sheet. The management team and Board of Directors would like to thank the shareholders for their continued support.
Moving the 2013 dividend forward sounds great until you realize that it’s less than a 1 percent yield and it’s going to cost the company just one million dollar. They could have paid ten years worth of dividends and it’s still wouldn’t significantly impact the balance sheet.