Net-Nets Too Cheap to Ignore

One of the regular screens I run looks for stocks trading near or below net current asset value. This is an approach successfully developed by investment guru Ben Graham and has been tested by many practitioners and academics for decades. Finding stocks that trade for two-thirds of NCAV is rare these days, but a few trade cheaply enough compared to the value of current assets minus all debt that they are good candidates for enterprising value investors.

When I ran the screen this morning, I found two interesting stocks worth buying because they have simply become too cheap not to own. Both are former growth stocks that have stumbled and now trade for around the value of the cash, inventory and receivables on the balance sheet. Interestingly, both are in the data storage business. Continued delays in corporate IT spending, as well as the dominance of companies such as Seagate (STX) and EMC (EMC), have hurt the companies, but the long-term future of the data storage business is bright and I expect both to recover over time....495 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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