Have you considered the implications if the company were to sell those bonds? As long as they’re classified as held to maturity, the firm doesn’t have to mark them down to current fair value. I don’t know when they bought them, but for example, if the bonds were purchased back in 2020 near 0% rates and are now trading at ~70 cents on the dollar, the unrealized loss doesn’t show up. But if the company decided to liquidate, they’d be forced to recognize that loss.
I actually looked into that a bit more closely. In the notes they explicitly state that the U.S. government bonds are classified as available-for-sale securities, not held-to-maturity. That means they’re carried at fair value on the balance sheet, with unrealized gains and losses flowing through OCI.
So if rates had moved against them, you would see that reflected already as a reduction in equity, not hidden at amortized cost. In fact, as of March 2025 they show a small unrealized gain of about $18k on the portfolio. Also, the company has been rolling these positions, $2.45m of securities matured or were sold in the prior six months, which looks like they’re managing it more like a liquidity reserve than a long-dated investment.
So the risk of a large unrecognized mark-to-market loss isn’t really there, since these bonds are already marked at fair value and most are short-dated Treasuries coming due within a year.
Unbelievably deep dive into a tiny company ,.. dissecting to find the edge.. you remind me of highly successful Ron Barron who runs namesake fund… anyway I am curious to see how it fares through my UVCMI analysis
Net Net basket investing is its own sub genre of value investing and it actually involves diversified small bets across businesses such as this. Some workout, some don't.
Everyone's entitled to their opinions ofc and should invest how they want with their own money. But you did come off a little trollish in the comments jsing.
bid/ask is 0.17x0.448 vs last price 0.069 so the 400k market cap seems like it's not a real price, have you been able to build a position at these prices?
yes, the spread is enormous, and it’s unlikely you’d get filled anywhere near the most recent price. I don’t have a position in CNGA. I just found the stock very interesting and wanted to write about it for the love of the game.
To build a sizable position, limit orders combined with patience would be the best approach. Even then, there’s no guarantee you’ll get filled at preferred prices or in the position size you want.
Thanks, Matt! I don’t know what they did with their cash, or really much of anything, prior to 2017, but since then they haven’t paid any dividends, and the share count has stayed unchanged, so no buybacks either. It looks like they’ve mainly used free cash flow to build and roll a portfolio of U.S. government securities, essentially keeping excess cash in Treasuries as a liquidity reserve.
In other words it’s piling up on the balance sheet. This is really the problem with such companies - you’ve got to wonder if the brothers that own most of the company don’t just view it as their bank account. Perhaps when they need the cash they’ll pay a dividend, but they might also just pay themselves a bonus.
I actually really like this idea. There is probably a huge challenge in actually getting a buy order to fill at any kind of major discount, but not impossible! This is the kind of stock that requires patience to get in and willingness to lose it all and/or sell on the first big spike. It's what I call a "garbage stock" and I don't say that disparagingly, I almost exclusively invest in garbage :) good work finding it.
Oh I'm gonna be monitoring order fill, you never know with these. Sometimes you get lucky and get a double in the first week just cause the bid/ask is so wonky 😂
I'll letcha know if I actually get any kind of position filled
You lacked to discover further due diligence on the operators - the HVAC company named Conair. The principals defaulted on a performance bond with a Catholic school on Long Island and the school hired a replacement contractor to finish the work. The work was inspected for the school by a well regarded engineering firm that found the faulty work. The HVAC company did not complete the corrective work and the performance bonding company, Travelers Surety, stepped in to hire the replacement contractor to finish the job. The corrective work cost Travelers close to 2.5 million dollars. Horrible track record. Horrible analysis, horrible stock pick.
This is too small, and it is an HVAC contractor with no moat at all. It’s really easy to get a contractors license, trade school grads and union guys easily get licenses. Then 2 brothers operate this for their benefit, shareholders are an afterthought. This stock is easy to manipulate because of low float and your piece which will get some to buy it. Would anyone buy this to hold long term? I don’t think so. Would anyone want to put 10 percent of their net worth into this. I don’t think so.
I wanted to make the point of deploying significant capital that would have an overall affect ones net worth. A good stock pick should enable conviction and deploy capital. This investment seems like a pump / dump stock which are in my opinion antithetical to value investing.
I chuckled at the name as it is also the name of a Nicholas Cage prisoner movie. You make great points for the "why" but i am leery at the same time. Great find by you. Enjoyed the read, thx
Have you considered the implications if the company were to sell those bonds? As long as they’re classified as held to maturity, the firm doesn’t have to mark them down to current fair value. I don’t know when they bought them, but for example, if the bonds were purchased back in 2020 near 0% rates and are now trading at ~70 cents on the dollar, the unrealized loss doesn’t show up. But if the company decided to liquidate, they’d be forced to recognize that loss.
Hey Alessandro, good to hear from you.
I actually looked into that a bit more closely. In the notes they explicitly state that the U.S. government bonds are classified as available-for-sale securities, not held-to-maturity. That means they’re carried at fair value on the balance sheet, with unrealized gains and losses flowing through OCI.
So if rates had moved against them, you would see that reflected already as a reduction in equity, not hidden at amortized cost. In fact, as of March 2025 they show a small unrealized gain of about $18k on the portfolio. Also, the company has been rolling these positions, $2.45m of securities matured or were sold in the prior six months, which looks like they’re managing it more like a liquidity reserve than a long-dated investment.
So the risk of a large unrecognized mark-to-market loss isn’t really there, since these bonds are already marked at fair value and most are short-dated Treasuries coming due within a year.
So I did get a share filled at $.27 this morning, do with that what you will 😂
That’s indeed a big spread 😂 Hopefully the stock returns to profitability and trades back to its old levels.
Unbelievably deep dive into a tiny company ,.. dissecting to find the edge.. you remind me of highly successful Ron Barron who runs namesake fund… anyway I am curious to see how it fares through my UVCMI analysis
Thank you, Dr. UV, those are some really kind words. Someday my goal is to start a fund myself, even though it’s still a long way to go.
Net Net basket investing is its own sub genre of value investing and it actually involves diversified small bets across businesses such as this. Some workout, some don't.
Everyone's entitled to their opinions ofc and should invest how they want with their own money. But you did come off a little trollish in the comments jsing.
bid/ask is 0.17x0.448 vs last price 0.069 so the 400k market cap seems like it's not a real price, have you been able to build a position at these prices?
Hello Sardine Trader,
yes, the spread is enormous, and it’s unlikely you’d get filled anywhere near the most recent price. I don’t have a position in CNGA. I just found the stock very interesting and wanted to write about it for the love of the game.
To build a sizable position, limit orders combined with patience would be the best approach. Even then, there’s no guarantee you’ll get filled at preferred prices or in the position size you want.
Nice find. What have they done with free cash flow in the past tho? Have they paid any dividends?
Thanks, Matt! I don’t know what they did with their cash, or really much of anything, prior to 2017, but since then they haven’t paid any dividends, and the share count has stayed unchanged, so no buybacks either. It looks like they’ve mainly used free cash flow to build and roll a portfolio of U.S. government securities, essentially keeping excess cash in Treasuries as a liquidity reserve.
In other words it’s piling up on the balance sheet. This is really the problem with such companies - you’ve got to wonder if the brothers that own most of the company don’t just view it as their bank account. Perhaps when they need the cash they’ll pay a dividend, but they might also just pay themselves a bonus.
I actually really like this idea. There is probably a huge challenge in actually getting a buy order to fill at any kind of major discount, but not impossible! This is the kind of stock that requires patience to get in and willingness to lose it all and/or sell on the first big spike. It's what I call a "garbage stock" and I don't say that disparagingly, I almost exclusively invest in garbage :) good work finding it.
I totally agree. Building up a position would be very tough, and you’re definitely not going to get the $0.069 price.
But still, it looks like a really cheap little cigar butt.
And yeah, “garbage stock” is actually the perfect term here! They could literally stop filing tomorrow.
Oh I'm gonna be monitoring order fill, you never know with these. Sometimes you get lucky and get a double in the first week just cause the bid/ask is so wonky 😂
I'll letcha know if I actually get any kind of position filled
An accurate name: CONair.
Bargepole: two insiders have total control. Business behavior is dodgy. Prohibitive spread.
Minority shareholders and customers are good for conning.
You lacked to discover further due diligence on the operators - the HVAC company named Conair. The principals defaulted on a performance bond with a Catholic school on Long Island and the school hired a replacement contractor to finish the work. The work was inspected for the school by a well regarded engineering firm that found the faulty work. The HVAC company did not complete the corrective work and the performance bonding company, Travelers Surety, stepped in to hire the replacement contractor to finish the job. The corrective work cost Travelers close to 2.5 million dollars. Horrible track record. Horrible analysis, horrible stock pick.
The spread is enormous, so I would say that this stock is uninvestable.
This is too small, and it is an HVAC contractor with no moat at all. It’s really easy to get a contractors license, trade school grads and union guys easily get licenses. Then 2 brothers operate this for their benefit, shareholders are an afterthought. This stock is easy to manipulate because of low float and your piece which will get some to buy it. Would anyone buy this to hold long term? I don’t think so. Would anyone want to put 10 percent of their net worth into this. I don’t think so.
Not every investment is supposed to be long term and account for 10% of net worth. Such a weird thing to say.
I wanted to make the point of deploying significant capital that would have an overall affect ones net worth. A good stock pick should enable conviction and deploy capital. This investment seems like a pump / dump stock which are in my opinion antithetical to value investing.
I chuckled at the name as it is also the name of a Nicholas Cage prisoner movie. You make great points for the "why" but i am leery at the same time. Great find by you. Enjoyed the read, thx
Comments are for cnga
Cheapest for many reasons!