In my unending search to uncover undervalued and badly named stocks I came across: “CAPEX SA” (CAPX.BA). CAPEX is an Argentinian electric utility serving the completely deserted but somehow still under-penetrated Patagonia region of South Ameria. We are initiating coverage of CAPEX with a SELL rating. CAPEX has a strong track record of raising and spending capital but that seems to be where the story ends.
A classic CAPEX investment:
CAPEX’s power plant in Neuquén Argentina; shown here along with the 10 people who actually live in Neuquén Argentina
If investors insist on putting money to work in the “companies named after financial statement line-items” universe, we recommend Revenue AG (which has a compelling top-line growth story) as well as Synergies Inc (which we view as a likely acquisition target).
We also reiterate our underweight rating of Diluted, Shares, & Co. which looks expensive as a result of perpetual equity offerings and excessive option issuance.