Here, we highlight three stocks trading below their net current asset values (NCAV).
Investment managers and financial media pundits often say Benjamin Graham’s famous Net Current Asset Value stocks no longer exist. They claim the strategy can’t be implemented anymore because the stocks are too hard to find.
The Stock Market Blueprint’s NCAV stock screen currently shows nearly 20 US listed stocks selling below their NCAV. Several more are trading just slightly above this metric.
Considering that Graham suggested investing in baskets of 10-30 NCAV stocks, there appear to be more than enough opportunities for individual investors.
Warren Buffett nicknamed it the “cigar-butt approach” because “a cigar-butt found on the street that has only one puff left in it may not offer much of a smoke, but the ‘bargain purchase’ will make that puff all profit.”
The screen finds stocks trading for less than the difference between current assets minus total liabilities. There is no regard given to the company’s long-term assets or future profits.
Here is a breakdown of the three stocks with the lowest price to NCAV as found on The Stock Market Blueprint’s NCAV stock screen.
American Lorain Corporation (ALN): Develops, manufactures, and sells various food products.
- Current Assets: $181 Million
- Total Liabilities: $89 Million
- Total Shares: 38 Million
- Net Current Asset Value: $2.41
- Current Price: $0.59 (closing price on 2/16/17)
- Price/NCAV: 24%
Sears Hometown & Outlet Stores, Inc. (SHOS): Engages in the retail sale of home appliances, lawn and garden equipment, tools, and hardware.
- Current Assets: $470 Million
- Total Liabilities: $219 Million
- Total Shares: 23 Million
- Net Current Asset Value: $11.08
- Current Price: $3.90 (closing price on 2/16/17)
- Price/NCAV: 35%
Emerson Radio Corp. (MSN): Designs, sources, imports, markets, and sells various houseware and consumer electronic products around the world.
- Current Assets: $58 Million
- Total Liabilities: $1 Million
- Total Shares: 27 Million
- Net Current Asset Value: $2.09
- Current Price: $1.16 (closing price on 2/16/17)
- Price/NCAV: 56%
Build your own portfolio using the stock screens on The Stock Market Blueprint.
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