AVX: A Pristine Balance Sheet

With a current book value of $10.62 per share, the company currently trades at just 0.72 times book. If you back out $164 million of goodwill and other intangibles of $93 million, tangible book value per share is $9.12 per share, so AVX currently trades at just 0.84 times tangible book value.

Buying AVX at its current price of $7.63 is theoretically like buying $4.72 in cash and securities and a long dated call option on the business for $3.11 while getting the rest of the company's assets thrown in for free.

AVX has also been buying back stock -- $14 million worth in the past four quarters, which may seem like a drop in a bucket for a company with more than 170 million shares outstanding. However, with Kyocera owning 71% of the shares and U.S. institutions owning the majority of the remaining shares (Third Avenue Management owns 10.71%), the float is not very big.

There's little doubt that a deepening recession is priced into AVX shares. If indeed business suffers further from here, the major question that I have for this or any other company is whether or not they have adequate resources to survive a prolonged downturn. Given AVX's current resources, namely $800 million in cash and securities along with no debt, I believe that the company can indeed live to fight another day.

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Know What You Own: AVX is in the diversified electronics sector; other stocks in this field that may interest investors include KEMET Corp. (KEM - commentary - Cramer's Take), Vishay Intertechnology (VSH - commentary - Cramer's Take), Tyco Electronics (TEL - commentary - Cramer's Take), LG Display (LPL - commentary - Cramer's Take) and TDK Corp. (TDK - commentary - Cramer's Take).

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At the time of publication, Heller had no positions in the stocks mentioned.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, a fee-only financial planning he recently launched. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.