This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Avalon Holdings Trading Low And Jumping On Oil Boom

In Peter Lynch’s bestselling book , One Up On Wall Street, he comments that the boring businesses are generally the ones that make the best investments. In addition, Lynch believed that boring businesses with a niche or specialist product are almost perfect from an investment perspective. This is why I’ve decided to take a look at Avalon Holdings Corp.

Avalon Holdings Corp NYSEMKT:AWX provides hazardous and nonhazardous waste brokerage and management services as well as landfill management services. The company offers its services to industrial, commercial and government customers throughout the United States. In addition, the company operates and manages golf courses, fitness centers, tennis, spa services, dining, and banquet facilities, as well as a travel agency. The company has a market capitalization of $19.3 million and an average daily volume of 3,650.

Also see: Springleaf Holdings and the re-emergence of sub-prime consumer lending

Balance sheet

Looking at the balance sheet, it would appear that Avalon Holdings Corp NYSEMKT:AWX is a fiscally stable company. Current assets cover current liabilities 1.8 times and debt is almost non-existent. Debt-to-equity is only 1%. Actually, net-cash works out at around $2.10 per share.

The company’s book value per share is $10.7, which means at current prices Avalon is trading at a price-to-book value of 0.5.

Avalon Holdings performance

Due to the fact that Avalon Holdings Corp NYSEMKT:AWX is a service company, profit margins are razor thin and operational gearing is high. Indeed, for full-year 2012 the company’s EBITDA margin came in at only 2.5%. This means that depreciation has a huge effect on the company’s overall profitability. Including depreciation and amortization, the company reported a loss for the year.

Also see: Have You Got an Edge over the Markets?

Stripping out non-cash items, Avalon Holdings Corp NYSEMKT:AWX was cash flow positive during 2012 and has been throughout the first nine months of this years. The company’s cash balance expanded 25% year-on-year through to the end of the fiscal third quarter.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AWX $1.75 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs