Profitable Canaf Group (CAF.v) @ .065$ to announce 2011 results next week

CANAF GROUP (CAF.v) @ .065$

The company is expected to release its annual results next week. In the first 9 months of the year, the company generated over 10.7M$ of revenues with net profits of 314k. Long term debts were a mere 150k while having over +.034$/share of cash on hand, and trading at .065$/share.

The company was has been free cash flow positive, but continues to trade below 10 cents, with the current market cap hovering around 3M$. It is interesting to note that their main division Quantum (coal processing) has been profitable in the past 8 years, even through the financial crisis. How the stock continues to trade below 1x sales is puzzling to say the least.

Investors have not picked up this stock on their radar, but its consistent profitability and cash generation will most likely shine next week once again, if logic prevails. Also of interest, one should note that the company received a 20 cents takeover bid early 2010, and is in final negotiation for a lawsuit settlement in their favour worth up to 10.4M$ (+.22$/share).

With solid customers like Arcelor Mittal and BHP Billiton, their backlog is constant and actually, their problem is meeting their customers demand. The company is looking for workarounds to satisfy the increasing demand for steel in Asia, and reconstruction in the middle east following the devastation of the Arab unrest.

While providing a safety net due to its historical profitable behavior, the metrics are so low that price multiplication in 2012 could very well be up for grabs for early takers. Good luck to all.

The above is simply my personal understanding and not to be construed as investment advice. I’m not a broker, director, manager or employee of the aforementioned company, just a shareholder. Some typos could have occurred, do your own due diligence.