Heads i win, tails i don't lose much (continued) - WDS Limited (ASX: WDS)

Not long ago, WDS Limited saw it's shares trading at around $1. After significant earnings downgrades, lost contract work, a fatality at a site (my thoughts are with the family) and the resignation of the CEO, WDS shares are now trading at around $0.25.

 With the company trading at a significant discount to book value, this may represent significant value. Furthermore, it also may represent protection of principle in a liquidation. Given the longer term outlook on the company, i believe this represents a decent value buy. Other upside may come from the fact that company's revised earnings forecast doesn't factor in any successful contracts. In this case, if any notable contracts are won, this will see a big inclination in the top and bottom lines. The company is also net cash (important for these types of businesses) and generates cash. Moreover, the company also seems to have upside potential in the energy sector of its business which is growing.

All in all, any upside may see the company's share price shoot (vice versa). Given that the medium term looks more promising, a high dividend yield may also result for shareholders who wish to buy in at current levels. Or, the company can fall flat on its face, but don't forget the NTA (which is no guarantee but can be used as a guide).

While the share price may experience some serious price gyrations, (including spikes in both directions) I believe at current price levels of  ~$0.25, WDS Limited is a sound, low-risk buy.

As a side note, given the low interest rate environment, and the resulting effects on 'risky' assets such as shares, buying Growth At a Reasonable Price (GARP) is becoming more expensive and less 'resaonable'. A slight bias toward holding cash may be ideal.  This just makes companies like WDS Limited relativity better as a value buy (as the former is rising in price, which decreases its attractiveness).  Moreover, given the negativity relating around contrarian investing, a well-diversified portfolio of these stocks is necessary.Some others which are worth considering are Arrium (ASX: ARI) and Mineral Resources (ASX: MIN). ;)