Tandy Leather Factory, Inc. (TLF): A Bull Case Theory

We came across a bullish thesis on Tandy Leather Factory, Inc. (TLF) on Deep Value Insights’ Substack. In this article, we will summarize the bulls’ thesis on Tandy Leather Factory, Inc. (TLF. Tandy Leather Factory, Inc. (TLF)’s share was trading at $2.94 as of 23^rd May. Tandy Leather Factory, Inc. (TLF’s) trailing P/E was 1.96 according to Yahoo Finance.

Tandy Leather Factory (NASDAQ: TLF) is an overlooked, century-old niche retailer operating in the Amazon-resistant leathercrafting space. Despite being a nano-cap stock with no Wall Street coverage and just 273 shareholders, Tandy is quietly profitable, debt-free, and consistently generates free cash flow. Its network of 102 stores across the U.S., Canada, and Spain serves a loyal customer base of hobbyists and artisans who rely on in-person service and workshops—something e-commerce struggles to replicate.

While not a growth story, the company has improved operationally by cutting underperforming stores, boosting per-store revenue, maintaining strong margins, and initiating a $5M buyback. Tandy is trading at a significant discount to its liquidation value. As of year-end 2024, it had a net current asset value (NCAV) of $3.86 per share versus a $2.98 share price. After adjusting for the $26.5M sale of its headquarters and a $1.50 special dividend, the adjusted NCAV is now ~$4.20 per share—putting the current price at a 29% discount.

Although earnings dipped in 2024, with net income falling to $0.83M, the company remains fundamentally strong, ending the year with over $13M in cash and growing equity. Insiders own nearly 60% of the stock, led by Chairman Jefferson Gramm (34.4%), and have demonstrated shareholder alignment, as seen in the post-sale dividend. Risks remain—thin margins, inventory-heavy operations, and macro pressures—but the business is resilient. With no long-term debt, a committed management team, and strong brand loyalty, Tandy offers a rare deep value opportunity hiding in plain sight for patient investors.

Previously, we have covered Tandy Leather Factory, Inc. (TLF) in October 2024, wherein we summarized a bullish thesis by Buggy Whip Bargains on Substack. The author highlighted Tandy Leather’s potential undervaluation ahead of a possible $25M sale of its Fort Worth property, which could significantly reduce its enterprise value. Despite modest margins in 2023, TLF remained profitable, strengthening the case for a market revaluation. Since our previous coverage, the stock is down 31.94% as of 27^th May.

Tandy Leather Factory, Inc. (TLF) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 3 hedge fund portfolios held Tandy Leather Factory, Inc. (TLF) at the end of the first quarter which was 1 in the previous quarter. While we acknowledge the risk and potential of Tandy Leather Factory, Inc. (TLF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Tandy Leather Factory, Inc. (TLF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.