Corporate Liquidation: abrdn European Logistics Income $ASLI

This is not an investment advice, make your own research before investing

I discover this opportunity through the Liquidation Stocks Substack, which I highly recommend (check his Substack and X account).

I also suggest reading the analysis by Real Assets Value, which covers real estate valuation better than I do. My focus is mainly on balance sheet valuation and my thoughts on the quality of the lease clients and properties.

abrd European Logistics Income is an investment trust that focuses on acquiring and managing logistics properties.

Due to liquidity issues and the company consistently trading at a discount from its Net Asset Value (NAV), the board and management decided to liquidate the trust after a strategic review. This was announced on May 20, 2024, in a press release.

We know that the company invests in high-quality logistics properties with reliable tenants and inflation-linked contracts.

According to the 2024 Annual Report, the company’s property portfolio includes:

Here is the history of properties sold by the company:

  • March 2024: A warehouse in Meung, France, sold for €17.5 million (matching its book value).
  • January 2025: A property in Oss, Netherlands, sold for €15.7 million (1.9% above its 2023 book value).
  • January 2025: Two properties in Spain (Coslada, Madrid, and Barcelona) sold for €29.7 million (11% above their Q3 2024 valuation).

In May 2025, the company announced (in its latest unaudited NAV update) that five assets are under offer. After repaying the debt, the proceeds will be distributed to shareholders.

Historically, the company has sold properties at or above their book value, often with a premium. I am confident this trend will continue.

According to the May 2025 unaudited NAV update:


At the current exchange rate of €0.845 = £0.71, with the share price at 59.40 GBX, there is a potential upside of approximately 19%.

Real Asset Value estimated the liquidation timeline to be 12–18 months, while Liquidation Stocks predicted 2 years. I believe it will be closer to 2 years, which suggests an Internal Rate of Return (IRR) of about 9.09% (quite good).

I opened a position in this special situation at 57.60 GBX.

Hurco Companies – Classic net-net

This is not an investment recommendation, if you want to invest make your own research first.

Hurco Companies ($HURC) is a company founded in 1968 that designs, manufactures, and sells proprietary machine tools for the metal cutting industry. It’s a classic net-net stock with a soft catalyst in the medium to long term.

This industry is highly specialized but also very cyclical, depending on economic cycles. Investment in new tools for the manufacturing industry grows a lot during economic expansion and decreases during contraction periods. This is important to understand the company’s current situation and its future.

Overview

Between 15% and 20% of revenue comes from services and service parts (related to maintenance, replacements, and warranties), which provides some recurring revenue. Although this recurring revenue is still a small percentage, it’s worth noting.

The revenue by region is distributed as shown in the image:

This is important because 40% of revenue comes from the USA, and with the PMI index below 50, we can clearly see a negative economic cycle:

The company has no financial debt, only leases. Its leverage ratio over equity is just 6%, with a current ratio of 4.93x. Financially, the company is healthy with zero debt, which is excellent for managing the negative economic cycle and avoiding financial stress. Historically, the company has maintained low debt.

In terms of margins, the company reported operating losses in the last two years, 2023 and 2024. However, in 2021 and 2022, which were years of revenue growth, the operating margin was around 4% to 5%. This was lower than the margins between 2011 and 2019, which ranged from 8% to 11%. The lower margins in 2021 and 2022 were affected by higher costs due to inflation. In 2024, the company reduced its SG&A costs from $49 million to $46 million (one of the target of incentive plan is improve margin and reduce costs).

Hurco can generate free cash flow in positive years, with a free cash flow margin of about 5%.

In 2023, Hurco announced a share buyback program for a total of $25 million, which was extended from 2024 to 2026. Current results (last 10K) are shown in the image.

I think the buyback program’s progress is poor, with only 13% executed. I believe they are waiting for a better company cycle to continue the buyback.

Historically, Hurco paid a dividend, but in 2024, they suspended it to maintain financial health during this negative cycle.

I agree with the decision to suspend the dividend, and I understand why they paused the buyback due to poor financial results. However, at the current company valuation, with the stock price below net current asset value, it’s a good time to do a small buyback to return value to shareholders.

Management aligned or not?

Related to management, the 2025 proxy statement shows the salary composition as follows:

The table of salaries is shown here:

From this, I have two conclusions: I think the salaries are reasonable and fair. I like the short-term goals focused on margin improvement and the long-term incentive plan, which includes different variables:

You can review the 2025 proxy statement for more details.

The management’s salary mostly depends on the long-term incentive plan. The base salaries are acceptable, maybe a bit high, but nothing unusual for a U.S. company. Do they have skin in the game?

Yes, a little: the Chairman owns 3.24% of the company, and the CEO owns 1.88%. This is not much, and I would prefer more ownership.

Are they buying or selling stock? No, they are only receiving stock awards.

In conclusion, the management is somewhat aligned with shareholders, but not strongly. It would be a good sign if they bought shares at the current low company price.

Valuation

Valuing this company based on last year’s income statement is difficult due to operating losses caused by a sharp drop in revenue. Historically, Hurco has faced significant sales declines (with pressure on margins) followed by recovery in expansion cycles. Revenue drops occurred in 2009, 2013, 2015, 2019, 2020 (as expected), 2023, and 2024, matching periods when the PMI Index was below 50.

I’m waiting for a catalyst: the recovery and expansion of the manufacturing industry in the USA and globally.

Does this mean revenue will grow strongly in the coming years, as in past cycles? Not necessarily. This is a soft catalyst, and we don’t know if the industry will recover in the mid-term or if companies will choose Hurco’s machines. There’s no certainty here, but as I’ll explain later, we have a significant margin of safety.

This company is interesting because it trades below its net current asset value (NCAV) and below its tangible book value, which is similar to NCAV if we exclude items like long-term investments. Therefore, the assets act as insurance for our valuation, allowing us to use other multiples based on cash flow or earnings while waiting for better years.

First, I plan to use a valuation metric based on earnings and cash flows, modeling the company with a revenue recovery to $220 million in one year, an operating margin of 6%, and an effective tax rate of 25%.

I’ll assign these multiples, which align with the company’s history and cyclical industrial companies:

  • P/E: 10x
  • MC/FCF: 10x
  • EV/EBITDA: 6x
  • P/TBV: 1x
  • P/NCAV: 1x

We can expect similar profitability across all multiples, but for this company, I will focus 100% on valuing its balance sheet, ignoring other metrics, because this is a balance-sheet-focused investment.

We have three scenarios, and in general, except for the last one with a high discount on each item, I think we have a strong margin of safety on both earnings/cash flow and balance sheet valuations.

Conclusion

This is the kind of investment I’m happy with right now: a simple company with a focus on its balance sheet, an ideal potential catalyst, and a strong margin of safety. It’s similar to the investments Warren Buffett made early in his career. I highly recommend the book Buffett’s Early Investments.

Of course, this company is not risk-free. We don’t yet know how tariffs or a worsening trade war will affect it. A large portion of its revenue comes from the USA, and it has one factory in the USA but two abroad (one in Taiwan and one in China). It also exports to Europe, which could be a negative factor. However, I’m not sure what the outcome will be for this company. It might benefit by selling more in the USA due to less competition from foreign companies, but only time will tell. These are just assumptions.

For this reason, I opened a small position, just 3.5% of my portfolio, to wait and see what happens and how tariffs affect the company.

Thank you!