SeeThruEquity Initiates Coverage on Millennium Investment and Acquisition Co. Inc. (OTC: SMCG) with a Price Target of $2.50

NEW YORK, NY / ACCESSWIRE / October 3, 2016 / SeeThruEquity, the leading independent equity research firm focused on smallcap and microcap public companies, today announced it has initiated coverage on Millennium Investment and Acquisition Co. Inc. (OTC: SMCG).

The report is available here: SMCG Initiation Report.

We initiate coverage of Millennium Investment and Acquisition Co. Inc. (OTC: SMCG, “Millennium”) with a price target of $2.50 per share. Based in Old Bethpage, New York, Millennium is an intriguing special situation in the microcap space, which offers a combination of robust growth potential and a margin of safety from undervalued assets. Millennium has two key assets that appear to be steeply undervalued relative to its market capitalization. First, in 2015 the company purchased an active carbon (“AC”) biomass plant located in Kawaihae, Hawaii. The plant was purchased out of bankruptcy in June 2015, at a significant discount to fair value (recently appraised at $13.9mn) and the original investment ($44mn). Millennium is in the process of upgrading the plant to produce high grade premium activated carbon. Premium grade, low ash / high purity activated carbon has the potential to be a high impact product line for Millennium, as it has much more favorable pricing characteristics than the standard activated carbon commodity, due to its use in advanced technologies in the energy storage, medical and information technology industries.

Highlights from the report are as follows:

Large market potential for activated carbon

Millennium is in the process of upgrading the Kawaihae plant to produce high grade premium activated carbon. Premium grade, low ash / high purity activated carbon has the potential to be a high impact product line for Millennium, as it has much more favorable pricing characteristics than the standard-grade activated carbon commodity, due to its use in advanced technologies in the energy storage, medical and information technology industries. The plant has two years of macadamia nut shell inventory on site, and is located in proximity to key logistics including a macadamia nut manufacturing facility, industrial zones and a port with shipping capabilities. Millennium management believes the plant should be capable of producing activated carbon from 12,000 tons of macadamia nut shells each year, which would generate more than $5mn of EBITDA as it reaches commercial operations – before the impact of any byproduct revenues.

Compelling valuation

We see Millennium as offering a compelling valuation, as each of the company’s strategic assets appear to be worth more than the company’s market capitalization. Millennium marked its 12% investment in SMC Global at $7.7mn, or $0.58 per SMC Global share. This compares to Millennium’s recent market capitalization of $7.1mn – and we note that company has recently sold more than 600,000 shares at $1.22 in privately negotiated transactions with affiliates of SMC Global. As part of exploring an asset-backed debt financing, Millennium received an “as is” appraised value of the Kawaihae plant at more than $13mn. Including the company’s cash on hand of $2.8mn at the end of 2Q16, and adjusting for liabilities, we estimate a sum-of-the-parts at valuation of $2.21 per share. We also note that Millennium’s CEO, David Lesser, owns a 30% equity stake in the company, which should align his interests with those of shareholders.

Initiate coverage with a price target of $2.50

Our analysis of Millennium Investment and Acquisition Co. Inc. indicates a fair value estimate of $2.50 per share, implying an upside of 262% from the recent price of $0.69. The company offers an attractive combination of undervalued assets and potential for robust growth in the emerging market for premium grade activated carbon.

Please review important disclosures at www.seethruequity.com.

About Millennium Investment and Acquisition Co. Inc.

Millennium Investment and Acquisition Co. Inc. (MIAC) is an internally managed and closed-end asset management firm focusing on investment opportunities in alternative energy. The Company currently holds a 12% stake in SMC Global, an Indian financial services firm. The Company bought an activated-carbon plant in Hawaii on June 9, 2015 and plans to commercialize its activated carbon in the following years. MIAC’s revised investment strategy seeks to expand its portfolio in alternative energy.

For more information, please visit the Company’s website at www.millinvestment.com.

About SeeThruEquity

Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.

SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet. SeeThruEquity maintains one of the industry’s most extensive databases of opt-in institutional and high net worth investors. The firm is headquartered in Midtown Manhattan in New York City.
For more information visit www.seethruequity.com.

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SOURCE: SeeThruEquity

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