Revisiting Some Net/Nets

The last time I wrote about one of my favorite deep-value-investing techniques, finding companies that trade below their net current asset value (NCAV), some fairly interesting names were at or near the top of the list in terms of market cap. Fast-forward four months, and at least some of them have graduated and no longer trade below NCAV. Typically, when that happens, it's a positive, because the price has run up, bringing the market cap back above the companies' NCAV. That's what you hope for when buying net/nets.

Benchmark Electronics (BHE), which has bounced on and off the list over the past couple of years, has once again left net/net land. Shares are up 33% since late September, and the stock now trades at 1.2x NCAV. That's still not expensive, and the quality of Benchmark's balance sheet is still very good. The company ended the third quarter with about $254 million, or $4.33 per share in cash, and just $11 million in debt. Benchmark still trades below tangible book value per share, at 15x trailing earnings and about 16.5x 2012 consensus estimates. That might not seem cheap, but for a company trading close to NCAV, it's still interesting. In all the years that I've been researching net/nets, profitable ones of Benchmark's size -- market cap of $986 million -- have been few and far between....317 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.