The Best Net Net Stocks?

I looked through a lot of net-net's lately and didn't find all that much. On Zacks.com I screened for ones with zero long term debt. That diminished the universe of them along with ignoring all Chinese ADR's. So far this company called The LGL Group ticker LGL founded in the year 1917 seemed the most intriguing. Mostly because the company and stock price has not always struggled. The stock preformed very well in 2010.The company has $9.9 million in net current asset value and a market cap of just $8 mil. $5.4 mil of the net current asset value is cash. The company is not profitable. The last year of profitability was 2011. I put it sort of in the category of Emerson Radio MSN a perennial net because they are both electronics companies. MSN by the way is now selling for less than half of its net current asset value and is profitable.

Net-Net PRLS Update and Metals Setup

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.

 

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.

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.

Natural Gas Setup Emerging

One of the best patterns to trade is a breakout from a tight trading range. Such a fat pitch has been developing in natural gas lately. The channel lines are drawn out in these charts below. Whether it breaks out or breaks down there should be some significant follow through. Right now price is congesting at the bottom of the channel and looks poised to breakdown and plunge lower here. I have a buy stop set at 4.60 a share on DGAZ the 3X inverse natural gas ETF to short natural gas.  There may very well be whipsaw and this could be a fake out or failed signal but with energy getting hammered and a rush to liquidity in markets natural gas looks right to go much lower.