Emerson Radio (AMEX:MSN)

Emerson Radio Corp (AMEX:MSN) is one stock that appears to be a no-brainer. Its market cap, at $51m, is less than its net cash of $61m, yet the business is profitable, generating $7m of pre-tax profit in the last 12 months. Who wouldn’t be tempted by such numbers, until you learn the unpleasant truth about why this company deserves to be trading at such low multiples. Its management and owners are surrounded by countless accusations of corruption, so much so that if all are to be believed, shareholders of Emerson should expect nothing more than to be conned out of what is rightfully theirs. This is a warning to investors – an investment in Emerson as it currently stands is nothing more than a gamble on a change of ownership.

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