A Safe & Cheap company?

For quite some time I have been reading legendary investor Mr. Marty Whitman's books and shareholders' letters. Mr. Whitman believes in taking positions in companies which are "Safe & Cheap" . "Safe" refers to restricting investment in companies that are extremely well financed, apparently well financed and, whose businesses are understandable. "Cheap" refers to companies that are available at prices that seem to represent substantial discounts from what the common stock would be worth were a company a private business or a takeover candidate. Extremely well financed business means both "quality and quantity" of resources supporting the business must be exceptional. Searching for potential "Cheap" stocks by screening moneycontrol.com for stocks trading at lowest P/BV, I came across a company "Indian Card Clothing Ltd." Here are some details about it:
BSE Code: 509692
NSE Code: INDIANCARD
Current share price: 72.55
Market Cap: 32.81 Cr.
EPS (TTM): 18.91
P/E: 4
P/BV: 0.37

Background:The company pioneers in the manufacture of card clothing for the over the last three decades. It manufactures flexible and metallic card clothing and raising fillets and sheets and saw tooth wire. Its product range includes cylinder wires, flats tops, doffer wire, Lickerin wire, sundries, interlocking and metallic wires, raising fillets, raising brush fillets, raising brush sheets, yarn raising fillets, etc. Indian Card Clothing has also developed card accessories such as web catchers and Accura carding elements. Its R&D is engaged in developments that include special alloy steel wires in the Tenace series, a new generation of Triumph tops and specially developed AeroDoffer wires for better doffing. The Indian Card Clothing Company is a subsidiary of Multi Act Industrial Enterprises.




This is a condensed snapshot of its balance sheet:

Sources Of Funds:
Equity Share Capital 4.55
Reserves and Surpluses 74.31
Debt 0.27
Total Assets: 79.12


Application Of Funds
Net Block 20.94
Capital WIP 24.63
Investments 30.27
Inventories 10.23
Net Current Assets 3.28

In Investment section of its balance sheet, ICC has common stocks, bonds, mutual funds and bonds at cost basis of 30.27 crore. I calculated the present market value of the investments, it is certainly more than 31 crore even after recent market meltdown. These resources are of high quality, liquidity and currently do not support the earnings of company.
I did some calculation to get the Owner's Earnings of ICC and for the last 7 years it has come around 6.9 crores annually. These 7 years contain both up and down periods of textile industry on which the business of ICC is heavily dependent.
Management has not issued additional equity, hasn't raised debt to finance operation and managed the company conservatively in the last several years. Annual reports also don't show any litigation or contingent liabilities.

The investment operation I propose is buying whole of ICC by paying 33 crore. In return I will get 31+ crore of high quality liquid assets which I can sell without harming the operations of company and will get annual OE of 6.9 crore for free!!. This valuation implies that Mr. Market is not putting any value on the operations of ICC at all.
I think by this analysis, ICC is a "Safe & Cheap" play.

Now the question is why ICC came to this price if it was generation OE of 6.9 crores annually and has so much of liquid assets. I can think of two reasons, one is its heavy dependence on textile sector which has been facing lot of headwinds and consequently suppressed earnings in last year. Second one could be the lower valuation given by Mr. Market due to recent and ongoing recession.

My analysis and proposition is dependent on the outlook of textile sector. It is here I seek your opinion. Please give your views...