u/Haunting_Win_7959 ·
Reddit — r/ValueInvesting
· July 10, 2026 at 16:57
· ⬆ 16 pts
· 💬 12 comments
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Summary
The post highlights Mestek (MCCK), an OTC-listed manufacturer, as a deep value play with a market cap of $535M, $406M in cash/investments, negligible debt, and trailing net income of $82M, yielding an EV/earnings ratio below 2x.
The author argues the company is fundamentally cheap due to OTC listing, no analyst coverage, and a CEO who hoards cash for acquisition roll-ups, despite holding commodity hedges (gold) that some investors dislike.
Quality assessment: Well-researched DD – provides specific balance sheet figures, earnings history, and a clear thesis on why the market misprices the stock.
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Mestek (MCCK) has a market cap of $535MM.
It has $406MM in cash + investments on its balance sheet. So, cash + investments make up 75% of its market cap.
Also, it has no significant debt (only \~$7MM).
That means the enterprise value of this stock is $136MM.
(EV is how much it would cost you to buy the business outright \[Market Cap - Cash + Debt\]).
Are you with me so far? Here's the best part.
The TTM net income for the company is $82MM. This makes EV/Earnings < 2x.
This is not a melting ice cube. The business is steady (and growing). It has been profitable for over 22 years.
It's in an industry that's unlikely to disappear any time soon. (They manufacture HVAC equipment, architectural products like monumental skylights and louvers, and metal forming machinery.)
Why is it so cheap, then?
Well, there are a few layers to this answer, but first and foremost it is cheap because it's not on the NYSE/NASDAQ but on the OTC market with no analyst coverage.
Also, $166MM of the investments are commodity investments (I think mostly gold), made at the discretion of the CEO.
Some investors don't like this fact, but if you read the CEO's annual letters he says the commodity investments are a hedge against inflation.
They are hoarding cash IMO because the company is waiting to buy up little businesses in adjacent industries and grow them. They've had this kind of roll-up strategy for 50+ years.
The CEO does not believe in dividends because they get taxed twice, so I believe he is waiting instead to find more businesses to buy once they sell at lower prices.
I could go on and on about this company, but let me just end by saying that it is incredibly cheap, given that it's such a solid business. You rarely find companies with this kind of balance sheet. It's ridiculous.
Anyway, let me know what you think.
MCCK has an enterprise value of ~$136M against TTM net income of $82M (EV/Earnings <2x), a fortress balance sheet with 75% of market cap in cash, and 22+ years of profitability. OTC listing and lack of analyst coverage create a severe pricing anomaly; the CEO’s cash hoarding and roll-up strategy imply even higher intrinsic value when deployed. At less than 2x earnings with stable operations, MCCK offers a margin of safety and potential catalyst from eventual listing or acquisition ramp. Low liquidity (OTC), CEO’s commodity bets (gold) could impair value, no dividends, and long wait for value realization.
This Reddit post, published July 10, 2026,
features u/Haunting_Win_7959
discussing MCCK.
1 trade idea extracted by AI with direction and confidence scoring.