I just discovered that Conduril released their 2012 annual report in Portuguese a couple of weeks ago. Conduril is probably the cheapest company I own: earning €12.98/share while it’s currently trading around €32.50/share. Free cash flow per share is even more impressive this year, but this is because the amount of earnings that were converted to cash was low the previous years. Conduril is active in big construction projects that take multiple years to complete. Earnings are recognized based on how far the project is completed, but most of the cash only arrives when the project is finished. The historical financials below show how erratic the cash flows are compared to the earnings:
Think it’s pretty obvious that Conduril is extremely cheap, and what’s very interesting is that insiders account for the majority of buying volume last year. Since Conduril is extremely illiquid it was easy to get an overview of all transactions in 2012, and match this with the reported insider activity. Blue rows in the table below represent insider purchases:
It must be pretty unique to have insiders account for such a big part of the market. The total trading volume in 2012 was 73,730 shares and insiders bought 54,711 of those shares: that’s 75% of the total volume! I’m obviously pretty happy to be part of the remaining 25% :).
Author is long Conduril