Signals #7 — Real Cash, Hidden Assets & Hard Yield

A compact lineup of global value and special-situation ideas — from disciplined underwriters and overlooked industrials to European compounders trading below intrinsic value. Each company in this issue offers durable free cash flow, hidden asset value, or asymmetric upside in a market still anchored to short-term pessimism.

October 08, 2025

Overview:
RLI Corp is one of the few insurers with a multi-decade record of underwriting profits. The company specializes in niche, complex risks and has built a culture where underwriters prioritize profitability over premium volume

Financial Metrics (Oct 2025):
• Market Cap: $5.9B • EV/EBITDA: 14.4 • P/E: 18.4 • Dividend: 4.1%

Highlights:
• Strong underwriting culture reinforced by employee ownership.
• History of special dividends on top of regular payouts.
• Proven ability to shrink business when pricing weakens.

Risks:
• Slower growth in softer pricing cycles.
• Competitive pressure in specialty lines.

Conclusion:
A steady compounder in an unpredictable industry. RLI’s long-term discipline and shareholder alignment justify its premium valuation and dividend reliability.

Source: LRT Capital Management (Oct 2025)

Overview:
Tower Limited is a New Zealand-based general insurer operating across the Pacific. A cloud-native platform now runs nearly every customer interaction, positioning Tower as one of the most efficient underwriters in Oceania.

Financial Metrics (Oct 2025):
• Market Cap: NZD 662M • EV/EBITDA: 4.6 • P/E: 6.8 • Dividend: 9.2%

Highlights:
• Digital-first model driving 85% combined ratio.
• 26% ROE and growing personal-lines focus.
• Streamlined claims handling through core automation.

Risks:
• Exposure to weather events in the Pacific Islands.
• Concentration in small regional markets.

Conclusion:
Tower trades at a deep value multiple while returning nearly 9% in dividends. A tech-driven insurer priced like a legacy one.

Source: Contrarian Cashflows (Oct 2025)

Overview:
Moreld ASA provides engineering and maintenance services to offshore energy, marine, and industrial clients. Its contract-heavy model keeps utilization and margins stable even through commodity downturns.

Financial Metrics (Oct 2025):
• Market Cap: NOK 3.2B • EV/EBIT: 4.9 • ROIC: 25% • Dividend: 9.3%

Highlights:
• Three operating divisions: Ocean Installer, Moreld Apply, Global Maritime.
• Focused on maintenance and modification rather than exploration exposure.
• High return on invested capital and growing free cash flow.

Risks:
• Margin sensitivity to vessel leasing costs.
• Limited liquidity as a small-cap Oslo listing.

Conclusion:
A high-ROIC industrial compounder hidden in plain sight. With a 9% yield and lean balance sheet, Moreld offers real yield backed by real assets.

Source: Contrarian Cashflows (Oct 2025)

Overview:
Murphy USA operates 1,750 fuel and convenience stores, many located beside Walmart. The company has thrived amid fuel margin expansion and relentless buybacks since its 2013 spinout.

Financial Metrics (Oct 2025):
• Market Cap: $7.6B • EV/EBITDA: 9.5 • P/E: 16.4 • Dividend: 0.5%

Highlights:
• Structural fuel margin reset from 15¢ to 30¢ per gallon.
• Over 60% of shares retired since 2013.
• EBITDA target of $1.2–1.3B by 2028.

Risks:
• Flat fuel volume growth.
• Dependence on consumer spending cycles.

Conclusion:
A textbook compounder disguised as a fuel retailer. Murphy’s buyback cadence and margin resilience continue to outperform investor expectations.

Source: NZ (VIC, Aug 2025)

Overview:
Air Lease, a global aircraft lessor and smaller peer to AerCap, announced a buyout deal that creates a short-duration arbitrage opportunity with asymmetric upside.

Financial Metrics (Oct 2025):
• Market Cap: $7.1B • P/E: 7.7 • Dividend: 1.4%

Highlights:
• Base case: 3.2% annualized return over 6–9 months.
• Upside potential if a competing bidder emerges.
• Strong fundamentals and low leverage cushion downside.

Risks:
• Deal-break risk if financing terms change.
• Exposure to airline credit cycles if standalone.

Conclusion:
A defined-outcome special situation. Treasury-like base return with optional upside, limited downside, and short holding period.

Source: Middle Coast Investing (Oct 2025)

Overview:
Andritz AG is an Austrian engineering group with exposure to pulp, metals, and hydropower. The firm is transitioning toward decarbonization technologies while expanding its higher-margin service base.

Financial Metrics (Oct 2025):
• Market Cap: €6.1B • EV/EBITDA: 7.2 • P/E: 13.2 • Dividend: 4.2%

Highlights:
• €905M net cash and €9.75B order backlog.
• 11.3% EBITA margin in Environment & Energy.
• Service revenue now 41% of total sales.

Risks:
• Cyclicality in metals and pulp equipment orders.
• Governance risk from controlling shareholder structure.

Conclusion:
A high-quality industrial trading at 13× earnings versus peers at 20×. Andritz offers both cyclical recovery and structural exposure to green infrastructure growth.

Source: The Small Cap Strategist (Oct 2025)

Overview:
CAAP operates 53 airport concessions across Latin America and Europe. The company earns from both aeronautical fees and high-margin retail and parking revenue streams.

Financial Metrics (Oct 2025):
• Market Cap: $2.9B • EV/EBITDA: 5.6 • EV/Sales: 1.9

Highlights:
• Geographic diversity across six countries.
• Traffic recovery driving commercial yield expansion.
• Infrastructure reinvestment improving terminal efficiency.

Risks:
• Exposure to emerging-market FX and political shifts.
• Regulatory uncertainty in concession renewals.

Conclusion:
A rare emerging-market infrastructure play priced at 5.6× EBITDA. Strong cash flow visibility and underappreciated asset quality support long-term compounding.

Source: LRT Capital Management (Oct 2025)

Overview:
F.I.L.A. manufactures art, design, and stationery products globally. The company owns a valuable 26% stake in India’s DOMS, one of the fastest-growing writing brands in Asia.

Financial Metrics (Oct 2025):
• Market Cap: €501M • EV/EBITDA: 6.8 • P/E: 8.2 • Dividend: 8.1%

Highlights:
• DOMS stake worth ~€397M vs €140M book value.
• Reaffirmed €40–50M FCF and €100M EBITDA guidance.
• 2× net debt/EBITDA with expected Q4 cash rebound.

Risks:
• U.S. tariff impact on education products.
• Limited liquidity and small-cap volatility.

Conclusion:
A hidden-value small cap trading at a steep discount. FILA’s DOMS stake alone supports most of its market value, leaving investors with the core business for free.

Source: Halvio Capital (Oct 2025)

All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security.

Disclaimer:
All content in Deep Value Signals is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. The information provided reflects the opinions of the original authors and sources cited and is not a recommendation to buy or sell any security. Readers should conduct their own due diligence or consult with a licensed financial advisor before making any investment decisions. The publisher of Deep Value Signals does not guarantee the accuracy or completeness of any information presented and is not responsible for any investment outcomes resulting from the use of this content. Past performance is not indicative of future results.