Is anyone else interested in this guy? He’s an activist shareholder who focuses on taking over the boards of OTC small caps, microcaps, and nanocaps. (If the company isn’t traded over the counter at the time of the takeover, he delists it afterward.) He seems to prefer what he sees as strong, relatively boring, mismanaged companies, and has a thing for special dividends.

One of these companies is Rand Worldwide (RWWI), a software reseller, and another is Calloway’s Nursery (CLWY), which owns a small chain of garden centers in Texas. RWWI is one of the few tech stocks I’ve found that’s still up from a year ago, although this might be more because of its illiquidity than its fundamentals.

Not much has been written about Kamin. Dave Waters, who runs a small fund called Alluvial, talked about him in a blog post a couple of months ago:

What I appreciate most about Kamin’s leadership is the way he views cash and capital returns to shareholders. Calloway’s Nursery and Rand Worldwide are quality businesses. They each produce strong returns on capital and generate significant excess cash. The same is true of many other micro-cap companies, but at those companies, management seems unsure of what to do with this cash flow. They either let it pile up year after year, seemingly terrified or letting it go, or they blow it all on a mediocre investment at the top of the business cycle.

By contrast, Peter Kamin’s approach to cash seems to be something like this.

1. Can the business make simple investments that are highly likely to deliver 20-30%+ IRRs in the medium-term? If so, make them, even if they reduce profit this year and next.

2. Is there cash left over after making these investments as well as a buffer for ordinary operations? If so, return that cash to shareholders with special dividends.

3. Can the balance sheet accommodate limited debt financing at reasonable rates? If so, take on debt and use the proceeds to offset the equity component of investments and/or supplement special dividends.

Simple, rational and effective. This playbook has resulted in steady growth in profits and a very healthy stream of special dividends. A great recipe of shareholder returns! Calloway’s Nursery has declared dividends of $1.95/share over the last 12 months, 13% of its current share price. Rand Worldwide is no slouch either, paying out $1.50 for a nearly 9% yield. And neither did this while neglecting to reinvest for future growth. Calloway’s opened two additional garden centers earlier this month, while Rand Worldwide regularly performs tuck-in acquisitions of other software resellers.

I doubt Mr. Kamin will ever read this, but if he does, I hope he takes this as a sincere thank you from a grateful shareholder.

(https://alluvial.substack.com/p/value-thoughts?s=w)

And the first issue of Marcus Frampton’s newsletter (The Micro Cap & OTC Stock Letter) starts with a short discussion of CLWY:

https://static1.squarespace.com/static/5eff6e898853fb43f159bd0f/t/5f0fc95af4baae4ad468e43e/1594870107759/Micro+Cap+%26+OTC+Stock+Letter+April+2020+vFINAL.pdf