Replies to post #1045 on Avalon Holdings Corp (AWX)

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I've been buying too. Stock is too cheap here. There's a ton of support in the low $2's going back years, even when AWX wasn't profitable. Probably because of the strong balance sheet, with tangible book value up near $10/share.

But I wouldn't look for too much from the 10K. 2018 was an excellent year for them no doubt, with a big increase in profits. But they're taking a substantial impairment charge in Q4 of $3.1M-$3.3M to write down their salt water injection wells:

https://www.sec.gov/Archives/edgar/data/1061069/000143774918021678/awx20181206_8k.htm

There is a silver lining on this, which I don't think the market has sniffed out yet. AWX has been losing money on these salt water injection wells. Approx $800K/year. From the last 10Q:

"During the first nine months of 2018 and 2017, the salt water injection wells incurred a loss before income taxes of approximately $0.6 million and $0.7 million, respectively. The loss was primarily due to depreciation expense recorded on the facility and legal and professional costs incurred relating to Avalon’s appeal and mandamus processes described above."

Without the $800K expense, that would add .20/share to annual earnings! Probably won't eliminate them entirely, but those expenses should be greatly reduced starting in 2019. Q1 is seasonally their worst quarter. But Q2 & Q3 are seasonally strong so AWX likely to post some huge earnings in those quarters. Which would cause this low floater to spike higher again.