Tis the season for giving, and that’s exactly what I’m going to do today. I’m going to give you two stocks that are ridiculously cheap based on the value of the assets they own and have such strong balance sheets that there’s very little risk of these companies experiencing any type of financial distress during 2022.
They’re so cheap that any good news or even less bad news could send them soaring in value, and they both have potential catalysts that could unlock the value of these companies. These could be huge winners in 2022.
Now, they’re smaller companies, so you need to use a limit order to enter them or you’re not going to like what happens. And don’t buy a whole bunch of shares because just a little bit can generate massive profits if they work out as I expect them to over the next year or so.
First up is Astrotech Corporation (ASTC), which is a science and technology company using mass spectrometry instrumentation products to fuel three subsidiaries.
The first one, and the one with the biggest potential is 1st Detect, which does chemical analysis for airport security and military and police uses. It can be used in the food and beverage markets, and it also does breathe analysis.
It analyzes and identifies chemicals, and it does it more quickly, with more precision and higher accuracy rates that their competition. The units themselves are smaller, faster and less expensive than their primary competitors.
This is a business that has high growth potential. They’re starting to sell them now for airport checkpoints to look for chemicals that a visual or x-ray check might miss. This could become a huge business.
The next subsidiary is BreathTech, which is a development-stage business. But if the product works, then it is going to be big. They’re working on a breath test for COVID-19 and all of its variants.
What a breakthrough that would be if we had just a simple breath test to tell us whether we were positive or negative for COVID. It could be an incredibly valuable little business if this actually works and is eventually approved for use by the FDA.
The final subsidiary is AgLAB, which does field instruments for use on farms to analyze complex chemical compounds found in organic matter. There are literally dozens of uses for these instruments, but initially Astrotech has focused on selling them to the cannabis and hemp businesses across the United States.
So, here we’ve got this tiny little company that trades at 78% of tangible book value. They’ve got anti-terrorism, homeland security, cannabis, COVID tests… Any good news or announcements around any of those lines of business is going to bring in enormous amounts of speculative cash that could drive this stock way above where it’s current trading.
The chairman is a guy who I think probably learned a bit about business around the family supper table. His name is Thomas Boone Pickens III… His dad was T. Boone Pickens, the famous oilman and investor who made billions of dollars investing primarily in oil.
The company is extremely cheap, we’re not paying much for the assets at all and the company has a super strong balance sheet, so I don’t see anything going terribly wrong for this business in 2022. A single good news announcement should send the stock exploding higher.
Allied Esports Entertainment Inc.
The same I think is true for Allied Esports Entertainment Inc. (AESE). This is a SPAC deal gone bad. There’s no other way to put it.
They finally sold off their World Poker Tour business earlier this year for about $105 million. They have a small esports division that is growing and put on 110 events last year. They have a deal with Simon Property to do esports events in the mall, and the primary arena is in the Luxor Casino in Las Vegas.
But they’re kind of talking to investment bankers and shopping that business a business as well. They’re thinking they may step back and use the cash to get into another, higher-growth opportunity, probably in the gaming business.
Their largest shareholder is Roy Choi, who is a pioneer in the computer gaming business. It has a very smart and talented board with a solid history of building businesses. So, there’s all sorts of upside, and any good news about what they’re going to do with the cash could cause the stock to explode higher in 2022.
Right now, it’s mostly a pile of cash with a small esports business, and you’re paying 70% of the value of that cash.
They’re either going to focus on growing the esports division and spend the cash to add on another company and grow that, or they’ll sell the esports division if they can get a good price and go an entirely different direction with the business.
Either pass, if it’s well accepted by the market, is going to lead to this stock multiplying by several times the current stock price.
Remember… They’re small, so use a limit order and don’t buy a whole bunch because you don’t need to. Neither of these stocks are facing much risk of any serious financial distress because they’ve got a lot of cash, and you only need a little bit of good news to see their prices explode.
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