Description

Ballantyne of Omaha has a current market cap of under $9 million so move on if you like. The company supplies movie projectors to movie theaters and as you know there has been a 100 year flood in the cinema business with all but one of the major chains filing Ch 11. Simply put buy this stock if you believe people will still go to the movies. Ballantyne has a book value of $3 and only $6 million of debt which is currently on a short lease but I believe they will have no problem refinancing. Q1 was a 4 cent loss but cash flow was plus $1 million.Inventory is still too high but remember where they have come from. BTNE made 60 cents a share in 1999 and they have done an admirable job of dealing with the meltdown. A hidden asset of great importance to this company is large tax loss carrybacks, not carryforwards, so they are getting cash refunds on current taxable losses since they made so much money in the three prior years. Ballantyne has a very healthy replacement bulb business and a searchlight rental business they can sell if financing is not forthcoming. Any revival in the movie business and this stock will be $3 in a big hurry. This is a must own for anyone who believes in the magic of the movies.

Catalyst

Refinancing of very small debt, reemergence from bankruptcy of major theatre chains, a couple blockbuster movies.