I've been writing on Peerless PRLS here on the blog for years and in the last post on it I called it one of the most compelling net current asset stocks out there. They recently made an acquisition and now have a cash buyout offer for $7.00 a share. I talked on the phone with Peerless PRLS Chairman and CEO Timothy Brog five years ago. He's been very committed and patient in adding shareholder value with this company.
Metals are on trend support. I have a buy stop order in too long JNUG at 21.80. Crude oil has a setup as well. There is a triangular consolidation on this flag/pennant over the last few days. If crude continues to crash I have a buy stop order at 74 in to short oil with the ultrashort ETF SCO.
December 26, 2014
December 22, 2014
Net Current Asset Stocks and Positon Updates
I plan on going through some net current asset stocks over the next few days as I will have some time off. I plan on using the trusty Graham Investor Site and a basic site like either MSN or Yahoo and just screening for great balance sheet strength with light total liabilities to find some stocks net cash and net current assets. I'll post up any interesting finds later this week. Off of the top of my head I had expected Delia's DLIA to be a successful net-net because of the strong brand and potential they had for a turnaround. I mean they are practically in every mall in America. I see this stock is now a sub penny stock trading below $.01 a share. Luckily I had forgotten about it for some time and never took a position.
The net-net Delcath Systems DCTH I posted on recently where I said I wanted to see it even cheaper to its net cash did indeed fall. When I say net cash that is essentially selling for less than the cash on its balance sheet minus all debt. The stock fell as low as $1.09 and has gone as high as $1.50s. I may have missed it as I didn't pull the trigger but this looks like a flag and it could very well drop even lower. I prefer to scale into positions so if I pick up shares around $1 they might just be half of the position.
My long term portfolio is mixed lately. The Fidelity Emerging Asia Mutual Fund is underperforming the US Markets, however my dollar long position via the ETF UUP which I posted my buy of dollar ETF UUP on Twitter is finally coming around and breaking out again. My Pimco bond fund is basically flat.
The major US indices look very healthy here and it looks like we are heading for new highs any day here. Even the Russell 2000 looks like it will break out here very soon. The Russell has been the laggard. It's often seen as a key index to the overall market. I may do a post soon on it as it looks like there is a failed signal on the chart forming. Failed signals can often be extremely important. Jack Schwager wrote about them in his books.
The net-net Delcath Systems DCTH I posted on recently where I said I wanted to see it even cheaper to its net cash did indeed fall. When I say net cash that is essentially selling for less than the cash on its balance sheet minus all debt. The stock fell as low as $1.09 and has gone as high as $1.50s. I may have missed it as I didn't pull the trigger but this looks like a flag and it could very well drop even lower. I prefer to scale into positions so if I pick up shares around $1 they might just be half of the position.
My long term portfolio is mixed lately. The Fidelity Emerging Asia Mutual Fund is underperforming the US Markets, however my dollar long position via the ETF UUP which I posted my buy of dollar ETF UUP on Twitter is finally coming around and breaking out again. My Pimco bond fund is basically flat.
The major US indices look very healthy here and it looks like we are heading for new highs any day here. Even the Russell 2000 looks like it will break out here very soon. The Russell has been the laggard. It's often seen as a key index to the overall market. I may do a post soon on it as it looks like there is a failed signal on the chart forming. Failed signals can often be extremely important. Jack Schwager wrote about them in his books.
November 6, 2014
Deep Value Stock Blonder Tongue BDR
There is some activity in deep value asset land worth talking about. Blonder Tongue Laboratories (BDR) has always been a cheap value stock. It has never really delivered and seen the stock price follow through. Could this time be different? They just recently reported a strong quarter with actual sales growth and net income!! This has happened before as we can see from some of my old posts on BDR over the years. In 2010 the stock actually ran to almost $3.00 share. On this last quarter the buying volume in the stock is the highest I could find on any chart going back at least 10 years. The companies sales were up 23% and net income was $.06 per share vs. a ($.11) loss last year. Margins improved too. Management said they expect the rest of the year to be improved as well.
Right now the stock is 29% below net tangible asset value of $1.74 per share.
Since 2006 the stock has always found a floor around $1.00 a share. So it's pretty safe to say $1.00 is the current low side and about $3.00 the upside. I made an 8% gain on my DGAZ trade shorting natural gas. I posted the setup on the blog and my entries and exits on my Twitter page.
Right now the stock is 29% below net tangible asset value of $1.74 per share.
Since 2006 the stock has always found a floor around $1.00 a share. So it's pretty safe to say $1.00 is the current low side and about $3.00 the upside. I made an 8% gain on my DGAZ trade shorting natural gas. I posted the setup on the blog and my entries and exits on my Twitter page.
October 15, 2014
Natural Gas Setup Emerging
October 14, 2014
Two Net Current Asset Value Stocks
Lots of different things can become of net current asset value stocks. These are the truly deep value stocks that only a true value investor can love. Why? Because they aren't glamorous. They usually are not as sexy as say an Apple (AAPL) or GoPro (GPRO). Net Net's often don't even turn any profit. They are sometimes entering their journey into stock market obscurity.
However, sometimes they can be tremendous opportunities. Once in awhile a net net will be a former profitable growing company that just hit a rough patch. I find that many times these will have a "brand moat" like a major retailer. This can help the turnaround. Sometimes these good or great companies that turnaround and come out of net net territory can be big gainers and even multi-baggers. Yes, multi-baggers. Sometimes we value investors look for companies we that we know probably will never be good again. Companies that are just so cheap like trading below net cash that there might be a catalyst to bring out the value of the assets. Special situations and going private transactions can unlock that deep value. Or the company just recovers into profitability. One such company we will look at today that could possibly do so.
Delcath Systems (DCTH)
This troubled stock DCTH is seeing its stock price hammered lately. This is a struggling company. The reason I am interested in this one is the cash on the balance sheet. The cash has been stable. Let us crunch some numbers on this one. There is 25.1 million in net tangible assets or 2.64 per share, 22.7 million in net current asset value or 2.40 a share and 21 million in net cash which is 2.22 per share. The stock last traded at 1.77 a share. This is 20% below net cash. Technically this stock is taking out all kinds of support and I see it continuing to decline for awhile. Maybe we can see it around 40% below cash. That looks pretty good as cash stays stable.
SORL Auto Parts (SORL)
This is one of those that almost doesn't make any sense. This company has had sales and earnings growth and yet has been a net current asset stock. The last time I posted on SORL on the blog was last year. The stock ran up a lot and has started coming down again. Other than that not much has changed with this company. I can only guess the low price pegged on it is because it is a Chinese company. It's a small company too which is fine with me. The price to earnings growth rate (PEG) is nice here again at around 1.00. Last quarters earnings got shaved a little from forecasts. There is 129 million in net current asset value or 6.65 a share. The stock last traded at 3.48 per share or about half of its net current asset value. I think once SORL is below 3.00 a share it is in the buy zone. If you've read the blog over the past couple months or so you probably pinned me as just a technical analysis chart guy. Nope. I was a value investor before I learned how to read a chart. Why do I use both approaches? Simple. I like every edge I can get. I like to buy stocks that go up and short stocks that go down.
However, sometimes they can be tremendous opportunities. Once in awhile a net net will be a former profitable growing company that just hit a rough patch. I find that many times these will have a "brand moat" like a major retailer. This can help the turnaround. Sometimes these good or great companies that turnaround and come out of net net territory can be big gainers and even multi-baggers. Yes, multi-baggers. Sometimes we value investors look for companies we that we know probably will never be good again. Companies that are just so cheap like trading below net cash that there might be a catalyst to bring out the value of the assets. Special situations and going private transactions can unlock that deep value. Or the company just recovers into profitability. One such company we will look at today that could possibly do so.
Delcath Systems (DCTH)
This troubled stock DCTH is seeing its stock price hammered lately. This is a struggling company. The reason I am interested in this one is the cash on the balance sheet. The cash has been stable. Let us crunch some numbers on this one. There is 25.1 million in net tangible assets or 2.64 per share, 22.7 million in net current asset value or 2.40 a share and 21 million in net cash which is 2.22 per share. The stock last traded at 1.77 a share. This is 20% below net cash. Technically this stock is taking out all kinds of support and I see it continuing to decline for awhile. Maybe we can see it around 40% below cash. That looks pretty good as cash stays stable.
SORL Auto Parts (SORL)
This is one of those that almost doesn't make any sense. This company has had sales and earnings growth and yet has been a net current asset stock. The last time I posted on SORL on the blog was last year. The stock ran up a lot and has started coming down again. Other than that not much has changed with this company. I can only guess the low price pegged on it is because it is a Chinese company. It's a small company too which is fine with me. The price to earnings growth rate (PEG) is nice here again at around 1.00. Last quarters earnings got shaved a little from forecasts. There is 129 million in net current asset value or 6.65 a share. The stock last traded at 3.48 per share or about half of its net current asset value. I think once SORL is below 3.00 a share it is in the buy zone. If you've read the blog over the past couple months or so you probably pinned me as just a technical analysis chart guy. Nope. I was a value investor before I learned how to read a chart. Why do I use both approaches? Simple. I like every edge I can get. I like to buy stocks that go up and short stocks that go down.
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