Nearly Empty Nets

Without a doubt, it's been a very strange and equally boring year for one of my favorite corners of deep value: Companies that are trading below net current asset value (NCAV), or net/nets. While some interesting names have qualified for what is a fairly stringent screening process, the sheer number of net/nets has been low. I attribute this to a couple of factors.

First, although markets have been volatile at times this year, especially during the second half of the year, there has not been enough of a shakeout in order to drive the "throwing the baby out with the bathwater" effect that tends to hit the lower quality names typically found in net/net land. At this point, it appears as though the markets may end the year about where they started, and flattish market conditions typically aren't a great environment for net/nets. Second, and this is anecdotal at best, there's been a proliferation of research in the net/net arena, which shines a greater light on the potential opportunities....384 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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