Signals #3 — From Radio Stations to Peruvian Oilfields

Welcome to the third issue of Deep Value Signals — a weekly digest of undervalued stocks, distilled for busy investors. This week’s batch includes citrus growers, Japanese HR firms, media roll-ups, and high-yield oil plays across Latin America. Clean metrics. No noise. Just Signal.

Let’s get to it.

Misitano & Stracuzzi SPA (Italy)
[Ticker not listed on Yahoo Finance]

Overview:
Misitano & Stracuzzi is a publicly traded, family-run citrus producer based in Sicily. The company cultivates, processes, and distributes oranges, mandarins, lemons, and citrus juices throughout Italy and Europe. With full vertical integration and a focus on quality, the company has become a niche player in the recession-resistant agri-business sector.

Financial Metrics (as of May 2025):

• Market Cap: €30M (~$32.5M USD)

• Revenue (2023): €32.6M

• Net Income: €3.5M

• P/E: ~6x

• Dividend Yield: 7.4%

• ROE: >25%

Highlights:

• Consistent profitability and strong free cash flow generation

• High returns on equity, fueled by efficient capital use

• Stable dividend policy backed by cash generation

• Operates in a low-competition niche with price-insensitive demand

Risks:

• Highly weather-dependent, subject to crop volatility

• Family control could limit outside shareholder influence

• Small-cap with limited trading liquidity

Conclusion:
A small, underfollowed Italian agri-business with high returns on capital, a stable dividend, and a cheap valuation. For investors seeking steady cash flows from niche producers, this could be a fruitful find.

Source:
Company filings and registry data (Italy)

Alico Inc. (ALCO)

Overview:
Alico Inc. is a Florida-based agribusiness primarily engaged in citrus production. The company owns over 74,000 acres of land and is one of the largest citrus growers in the United States. In recent years, Alico has monetized land through sales to conservation and government programs, creating a dual business model of agricultural operations and real estate development.

Financial Metrics (as of May 2025):
Market Cap: $180M
Enterprise Value: $220M
P/E: ~12x
EV/EBITDA: ~9x
Dividend Yield: 6.5%
Net Debt: ~$40M
ROIC: ~8%

Highlights:

• One of the largest U.S. citrus producers, with strong asset backing

• Land sales to the state of Florida have generated recurring windfalls

• Solid balance sheet and consistent dividend payments

• Government conservation programs continue to provide cash infusions

Risks:

• Citrus greening disease continues to threaten crop yield and revenue

• Heavy dependence on government land sales for earnings stability

• Long-term agricultural margins are sensitive to weather and input costs

Conclusion:
Alico combines hard assets with recurring land monetization and agricultural operations. While citrus headwinds persist, its land portfolio and dividend make it a compelling asset-backed deep value play.

Sources:

• Alico Inc. Investor Relations

• Yahoo Finance – ALCO

• Company 10-Q filings (Q1 2025)

Townsquare Media Inc. (TSQ)

Overview:
Townsquare Media is a small-cap media company that operates 309 local radio stations in 66 U.S. markets. Under CEO Bill Wilson, TSQ has evolved into a digital-first operator, with over 57% of revenue now coming from digital advertising, marketing services, and subscription platforms. Its fast-growing division, Townsquare Interactive, serves over 30,000 small business clients nationwide.

Financial Metrics (as of May 2025):
Market Cap: $109M
Enterprise Value: $604M
EV/EBITDA: 7.3x
Free Cash Flow Yield: ~27%
ROIC: 7.7%
Dividend Yield: 11.9%
Debt/EBITDA: 5.2x

Highlights:

• Digital segment now generates the majority of revenue

• Recurring cash flows support a double-digit dividend yield

• Positive free cash flow despite GAAP net losses

• Attractive EV/Sales multiple of just 1.3x

Risks:

• Heavily levered with $500M in debt and just $5.5M in cash

• Dividend sustainability tied to digital ad momentum

• Negative book value and potential refinancing challenges

Conclusion:
TSQ is a rare small-cap with high free cash flow and an 11.9% dividend yield, supported by a growing digital business. It’s not without risk, but offers meaningful upside if digital revenue continues growing and the market rewards cash-generating microcaps.

Sources:

• Yahoo Finance – TSQ

• Townsquare Media Q1 2025 Earnings

• Stock Analysis – TSQ

SCI Engineered Materials, Inc. (SCIA)

Overview:
SCI Engineered Materials is a niche small-cap supplier of advanced materials used in physical vapor deposition (PVD) technologies. Its products—ceramic targets, powders, and other materials—are critical to industries like semiconductors, photovoltaics, optics, and defense. The company operates debt-free and focuses on high-performance material science with a long-standing customer base.

Financial Metrics (as of May 2025):
Market Cap: $20.3M
Enterprise Value: $11.1M
EV/EBITDA: 5.3x
EV/FCF: 4.6x
Free Cash Flow Yield: 14.3%
ROIC: 8.1%
Dividend Yield: 0%
Debt/EBITDA: 0x

Highlights:

• Debt-free with strong cash reserves (~$7.3M)

• Long-term supplier to high-growth industries like semiconductors

• Undervalued based on EV/EBITDA and EV/FCF multiples

• Potential activist or acquisition target given its low EV

Risks:

• Revenue concentration: 74% of 2024 revenue came from one customer

• Revenue and earnings declined YoY amid raw material and demand softness

• Limited liquidity and very small market cap

Conclusion:
SCIA is a deep value small-cap trading well below intrinsic value, with clean financials and mission-critical products. While customer concentration is a red flag, the company’s strong balance sheet and low valuation may appeal to patient investors.

Offshore Drilling Bonds — Seadrill, Valaris, Noble Corp.

Overview:
While equity investors often overlook the offshore drilling space due to its cyclical nature, fixed-income investors can find attractive returns in senior unsecured bonds from leading offshore drillers. These bonds currently offer 8%–11% yields to maturity and are issued by companies with improved balance sheets and strong backlogs following years of industry consolidation and restructuring.

🔹 Seadrill Ltd. (Unsecured Bonds 2029)

• Coupon: 8.375%

• Maturity: January 15, 2029

• YTM (May 2025): ~10.6%

• Credit Rating: B2/B

• Ticker: N/A – bond traded via CUSIP

🔸 Notes: Seadrill exited bankruptcy in 2022 with cleaner financials and a backlog of ~$2.6B. The company operates a modern fleet of drillships and semi-submersibles, mostly on multi-year contracts. Management has signaled a focus on returning capital.

🔹 Valaris Ltd. (Unsecured Bonds 2028)

• Coupon: 8.375%

• Maturity: April 30, 2028

• YTM (May 2025): ~9.4%

• Credit Rating: B1/B

• Ticker: N/A – bond traded via CUSIP

🔸 Notes: Valaris emerged from restructuring in 2021 and is now one of the most disciplined players in the sector. With $800M+ in cash and low net debt, the company is committed to shareholder returns while maintaining a strong fleet utilization rate.

🔹 Noble Corporation (Senior Notes 2030)

• Coupon: 7.875%

• Maturity: January 15, 2030

• YTM (May 2025): ~8.8%

• Credit Rating: BB-/Ba2

• Ticker: N/A – bond traded via CUSIP

🔸 Notes: Noble has taken a leadership position post-mergers and operates one of the youngest and most capable fleets in the world. Strong contract coverage through 2026 provides earnings visibility, and their recent $1B buyback authorization shows confidence.

Why It Matters:
These companies have survived the last cycle, rationalized capacity, and now operate in a tightening offshore rig market with improving day rates. The bonds offer a margin of safety through contractual cash flows and priority claims in capital structure.

Risks:

• Oil price volatility remains a key macro risk

• Industry still capital intensive with high operating leverage

• Bonds are high-yield and carry default risk if oil demand collapses

Conclusion:
Offshore drillers’ bonds offer equity-like returns with better downside protection. Investors seeking yield with some exposure to energy’s upside may find this fixed-income niche compelling.

Sources:

• Company Filings (Seadrill, Valaris, Noble)

• Finra Trace Data

• Bloomberg Terminal

• Market Commentary via Credit Sites and Kroll Ratings

DLocal Ltd. (DLO)

Overview:
DLocal is a Uruguay-based fintech company providing cross-border payments infrastructure for global merchants in emerging markets. It enables companies like Amazon, Netflix, and Microsoft to process payments in countries where traditional providers struggle. The company operates in over 40 countries with a particular focus on Latin America, Africa, and Asia.

📊 Financial Metrics (as of May 2025):

• Market Cap: $2.5B

• Enterprise Value: $1.96B

• Stock Price: ~$15.85

• EV/EBIT: 10.4x

• FCF Yield: 9.6%

• ROIC: 43%

• Net Margin: 26%

• Net Cash: $553M

• Revenue Growth (2024): +34%

Recent Performance:
DLocal grew revenue by 34% year-over-year in 2024, driven by strong momentum in its Africa segment (+84% YoY). Net income was $127M, with free cash flow slightly above $130M. Their take rate held steady at ~3.9%, and TPV hit $8.7B for the year.

What Makes It Interesting:

• DLocal is effectively a tollbooth on emerging market e-commerce growth.

• 98%+ FCF conversion due to asset-light model

• Exceptional ROIC of 43% highlights capital efficiency

• Massive net cash position relative to market cap

Risks:

• Geopolitical and FX volatility in emerging markets

• Reputation risk after short-seller reports in 2023, though no fraud was found

• Execution in Africa and Southeast Asia still developing

Conclusion:
DLocal is a rare high-growth, high-profitability fintech with strong unit economics and no debt. Trading at just over 10x EBIT with nearly 10% FCF yield, the stock offers a compelling mix of profitability and expansion potential—especially for investors willing to stomach emerging market volatility.

Source:

• “Emerging Market Moat: DLocal” from Rock & Turner Investment Analysis (March 2025)

• DLocal Q4 2024 Earnings

• Yahoo Finance – DLO

• Company IR

PetroTal Corp. (TAL.TO)

Overview:
PetroTal is a pure-play Peruvian oil producer operating the Bretaña oil field in the Marañón Basin. The company is known for low lifting costs, robust margins, and high cash returns to shareholders.

📊 Financial Metrics (as of May 2025):

• Market Cap: $472M CAD (~$345M USD)

• Enterprise Value: $366M USD

• EV/EBIT: 2.9x

• FCF Yield: ~30%

• Dividend Yield: 15%

• Net Cash: $130M

• ROIC: 30%+

• Net Production: ~17,000 bpd

Highlights:

• Strong production growth with a low decline rate

• Minimal capital needs enable outsized dividends

• Political disruptions in Peru pose ongoing risk, especially related to river transport routes

GeoPark Ltd. (GPRK)

Overview:
GeoPark is a Latin American E&P company operating in Colombia, Ecuador, Chile, and Brazil. It boasts a diversified asset base and strong operational control.

📊 Financial Metrics (as of May 2025):

• Market Cap: $455M

• Enterprise Value: $631M

• EV/EBIT: 2.6x

• FCF Yield: ~28%

• Dividend Yield: 8.7%

• Net Debt: ~$175M

• ROIC: 20%+

• Net Production: ~34,000 boepd

Highlights:

• Over $160M in FCF in 2024, even with lower oil prices

• Disciplined management with shareholder focus

• $50M buyback + dividend = over 15% combined shareholder yield

Conclusion:
Both PetroTal and GeoPark are FCF machines trading at bargain valuations. With disciplined capital returns, net cash (TAL) or manageable leverage (GPRK), and production visibility, they offer deep value in the small-cap energy space. Investors must weigh geopolitical and commodity risks, but the asymmetric upside is hard to ignore.

Sources:

• Davy Research, March 2025 – Latin American E&Ps

• PetroTal & GeoPark Investor Presentations

• Yahoo Finance – TAL.TO, GPRK

Human Holdings Co., Ltd. (2415.T)

Overview:
Human Holdings is a Japanese HR and education services conglomerate. The company operates in five segments: staffing, nursing care, education, beauty, and IT services. Despite a diverse portfolio and steady revenue, the stock trades at a deep discount to its cash and assets.

📊 Financial Metrics (as of May 2025):

• Market Cap: ¥16.3B (~$104M USD)

• Enterprise Value: ¥3.9B (~$25M USD)

• EV/EBIT: 1.8x

• P/E: 6.4x

• FCF Yield: ~13%

• ROIC: 11%

• Net Cash: ¥12.4B (~$79M USD)

• Dividend Yield: 2.4%

Highlights:

• Generates stable EBIT of ¥2.2–2.4B annually

• Net cash position represents nearly 80% of the market cap

• 10-year average ROE of ~10%, with solid margins and little volatility

• Founded and still led by the same CEO, with 53% insider ownership

Risks:

• Thin trading volume

• Modest growth profile; business is steady but not high-growth

• Little analyst coverage or Western investor attention

Lakeland Industries, Inc. (LAKE)

Overview:
Lakeland Industries manufactures and sells protective clothing and gear used in industrial, cleanroom, healthcare, and emergency response applications. While its products are essential and the company has zero debt, the stock has languished amid declining post-COVID demand and margin pressure.

📊 Financial Metrics (as of May 2025):

• Market Cap: $89.6M

• Enterprise Value: $57.2M

• EV/EBIT: 5.4x

• P/E: 10.9x

• EV/FCF: 6.3x

• ROIC: 7.8%

• FCF Yield: ~16%

• Dividend Yield: 2.2%

• Net Cash: ~$32M

Highlights:

• Serves essential end-markets with durable demand

• Net cash covers over 35% of market cap

• Trades at low single-digit EV/EBITDA and EV/FCF

• Healthy gross margins (~40%) despite industry softness

• Recently launched cost-cutting initiative to improve operating leverage

Risks:

• Revenue and margins remain below 2021 levels post-COVID

• Lack of growth drivers without new product or M&A

• Small-cap illiquidity and limited analyst coverage

Conclusion:
Lakeland is a well-capitalized, under-the-radar PPE play trading at a discount to intrinsic value. While growth is muted, the high FCF yield and strong balance sheet give it downside protection—and potential upside if margins normalize or demand improves.

Source:

• Hidden Value Stocks Quarterly – April 2025

• Yahoo Finance – LAKE

Athens International Airport S.A. (AIA.AT)

Overview:
Athens International Airport (AIA) is Greece’s largest airport, handling over 35% of the country’s air traffic. The company operates under a long-term concession agreement expiring in 2046 and is jointly owned by AviAlliance (~50%), the Greek government (~25.5%), and public shareholders (~24.5%).

📊 Financial Metrics (as of May 2025):

• Market Cap: €3.08B (~$3.34B USD)

• Enterprise Value: €3.04B (~$3.30B USD)

• EV/EBITDA: 10.3x

• P/FCF: 7.9x

• Free Cash Flow Yield: 12.6%

• Dividend Yield: 7.9%

• Net Debt: €781M (~$846M USD)

Recent Performance:

• Passenger Growth: AIA served ~31.9M passengers in 2024, up 13.1% from 2023

• Q1 2025 Update: Revenue rose 9% YoY to €125M; net income declined 8.1% due to exhausted carryforwards and higher Grant of Rights Fees

Strategic Developments:

• Expansion Plan: Capacity upgrades to handle 33M passengers by 2028 and 50M by 2046. Includes new aircraft stands, terminal expansions, and additional parking

• Scrip Dividend Program: €235.6M total; €84M reinvested at €8.88/share to fund expansion without new debt

Risks:

• Regulatory Cap: Air activity profits are capped at a 15% ROE; excess returns go to the state

• Concession Limit: All operations revert to the government after 2046 unless renewed

• Fee Reduction: Passenger fees drop from €15 to €3 in November, potentially cutting top-line revenue

Conclusion:
AIA offers investors a high-quality infrastructure asset with a durable competitive moat and strong FCF yield. While earnings are constrained by regulation and long-term concession structure, the airport’s monopoly status, expansion roadmap, and reinvestment strategy make it a compelling hold for yield-focused or infrastructure-oriented investors.

Source:

• Just A Value Investor — May 15, 2025

• Yahoo Finance – AIA.AT