Thursday, November 6, 2008

Net Current Asset Value Fest

The recent sell off in the market has created a legion of stocks trading under net current asset value. This was a method of investing popularized by Benjamin Graham, who needs no introduction. Lists like these should only be used as a starting point in doing research. Do not invest blindly in these stocks. Here is the list from an article that was published on October 30. The market has rallied a bit since then so make sure to adjust for that since some of the stocks have moved up.

NCAV = Market Capitalization / (Current Assets - Total Liabilities)
NCTAV = Market Capitalization / (Tangible Assets - Total Liabilities)
Cash = (Cash + Short Term Investments) / Market Capitalization)

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  1. One that I'm looking into is Value Vision Media (VVTV). It's market cap is at around 18mil but it holds 48mil in cash. Include its 32mil of FCC licenses and it seems to be a the perfect NCAV company.

    Need to look further into this.

  2. I know Value Vision. It's been cheap for awhile which isn't a good thing in my opinion. I'll keep putting all the best net current asset stocks on my blog. I may not find all the best but hopefully I'll continue this nice streak ; )

  3. I found a potential red flag with them last year
    Accounts receivables for the full year in 2007 grew just over 33% while sales only grew 10%. Looks like they are having a hard time getting customers to pay or something fishy is going on.

  4. I don't think VVTV is the perfect ncav company. It might be a perennial. SPAR or FINL were about perfect. You can tell bc they aren't the kind of company you'd expect to be that cheap

  5. If we weren't in a recession I'd say a basket of every apparel and retailer there would work and maybe USU. maybe a better idea to see who survives then buy : )

  6. It seems that based on the way the market is going, the list of NCAV's will only get larger.


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