This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Top Four Net/Net Plays

Stocks in this article: SCMR IM TECD

Editor's note: This was originally published on RealMoney. It is being republished as a bonus for TheStreet.com readers. To subscribe to RealMoney, click here.

As pessimism continues to dominate equity market activity, the "low tide" environment continues to banish more companies to the land of the net/nets. At last glance, I counted 367 companies trading below their net current asset values -- that is, in the simplest terms, current assets minus total liabilities, preferred equity and minority interests, if applicable.

In all fairness, the data from this stock screen has not been scrubbed and is inclusive of all companies with market caps above $5 million. However, the top of the list still includes some fairly large companies, at least as far as net/nets go.

What's more, several of these names are currently profitable. Some have relatively large amounts of cash and/or marketable securities on the books as well. Perhaps not surprisingly, those at the top of the list in terms of size (as measured by market cap) are all technology-related companies.

The last time we saw this many net/nets was in the aftermath of the tech bubble. Tech companies dominated then too, but the primary difference was that they were typically not profitable and did not have the liquidity and strong balance sheets we are seeing today.

The downside to this story is just how pessimistic investors have become. I'm a firm believer that the negativity constantly bombarding consumers and investors has forced many to the sidelines. We are in a "negative news cycle" for lack of a better term, and I continue to see the talking heads that reach most Americans dole out their daily doses of negativity, but often using apples to oranges comparisons to demonstrate just how bad things are.

I don't believe it's done maliciously; perhaps it's due to either a lack of proper research, the acceptance that all news these days must be bad by nature, or that it grabs ratings. While I'm not arguing that all is right with the world, I do believe that the lack of hope -- which is interestingly enough being perpetuated by the Obama administration -- helps to feed this recession.

Nonetheless, the environment is an interesting one if you believe that there are better days ahead, especially for companies that have the resources to weather several bad quarters.

Three Techs and a Jeweler
Top Four Net/Nets by Market Cap
Company
Ticker
Market Cap
NCAV
Mkt Cap/NCAV
Price
Price/Book
Cash & ST Inv
PE
Ingram Micro
IM
2040
2364.5
0.86
12.37
0.6
807
8.1
Tech Data
TECD
956
1415.2
0.68
19.15
0.57
385
9.1
Sycamore Networks
SCMR
710
823
0.86
2.51
0.73
823
NA
Signet Jewelers
SIG
647
977.3
0.66
7.6
0.31
36
3.5
SOURCE: Company Reports

More Stock-Picking Training

  • Net-Net vs. Free Cash Flow
  • Free Cash Flow Rules
  • 1 of 2

    Select the service that is right for you!

    COMPARE ALL SERVICES
    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!

    Markets

    DOW 17,804.80 +26.65 0.15%
    S&P 500 2,070.65 +9.42 0.46%
    NASDAQ 4,765.38 +16.9840 0.36%

    Brokerage Partners

    Rates from Bankrate.com

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs