Slim Pickings in Net/Net Land
One of my favorite deep-value screens is continuing to come up rather empty, offering few possibilities. I'm not at all surprised by this, because in rising markets, that is typical for net/nets (companies trading below net current asset value or NCAV). As a reminder, the formula used to identify whether a company is a net/net is: Current Assets – Total Liabilities (including minority interests and preferred stock if applicable). The results are then compared to that company's market capitalization in order to determine whether that name is a net/net.
I have seen market environments where there have been literally hundreds of net/nets. At this writing, I can identify just 14 with market caps greater than $50 million -- including nine that are in excess of $100 million. In the umpteen years that I've been researching, writing about, and investing in them, this is about as sparse as I have ever seen the "upper end" of net/net land....477 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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