Skechers SKX
This isn't the quality of company that is usually in net-net territory. It's no Nike in the footwear industry but it had $1.3 billion in sales and it has the kind of small brand moat I like. This is a good shoe brand. This stock got me pretty excited when I saw it around net-net territory because were it a year ago I would be backing up the truck and ideally buying some Skechers leaps.

The stock is right around NCAV. There is $9.47 per share in net current asset value and it trades for just under $10. The 52 week low is $9.25. Forward PE is 7. Skechers SKX sports a current ratio of 3.2. Quick ratio 2. 10% return on assets, 13% return on equity.

Sales and earnings are going to be taking a hit as the consumer is just not spending. I'd usually like to gauge a company like this based on what it's looking like as far as earnings and cash flow. If a stock seems way to out of line with future earnings growth then I might like it, especially if it falls on a panic sell-off from news or something. Unfortunately, this is a really bad economic environment for apparel companies like Sketchers. I can't be that sure of their earnings over coming months or years.

That's why I like stocks under net current asset value or stocks below net cash because its a hard metric of value. NCAV isn't all telling but it isn't hard usually to gauge if the company is really worth a price pegging it on bankruptcy. Mostly, there is a good possibility a stock is really cheap if it suddenly falls into net-net land and is or has been a consistent cash generating machine.

I'm not so sure on this one right now. I think the only big upside could come on institutions expecting a quick economic recovery and looking for the most beaten down sectors. Who knows what will happen though. This is a bad, bad recession. One good thing here in my opinion is it isn't a perennial. It hasn't been this cheap for years. I've seen cheap retail stocks like SKX give a lot of puffs.

I just noticed Adams Golf ADGF has NCAV of $6.67 per share and is trading range-bound between $2.75 and $3.50 the last ten days. It's very illiquid which is bad but I'm long some from $2.90 and looking to take this off soon in the mid $3s. Wish me luck. I might need it with this spread.

Cache CACH
Cache is a women's clothing retailer. This cheap retail stock is a lot smaller than Skechers and their earnings are pretty nasty. It's beaten down though with NCAV at $2.01 a share and it has found a little bottom and has quit free-falling, atleast for now. The stock is very volatile and liquid.

full disclosure: long ADGF