Look Beyond Latest Financials When Screening Net/Nets

NEW YORK (TheStreet) -- While conditions have not changed all that much in net/net land, a place that no company wants to end up by choice, there is a new addition following the latest round of earnings.

Overall the ranks are still thin for these companies that are trading below their net current asset value; at this writing, I count just seven with market caps in excess of $100 million. That's probably the fewest I've seen in the more than a dozen years that I've been researching this tiny corner of the investment landscape.

That is with the assumption that Ingram Micro (IMN) is no longer a net/net, following its acquisition of BrightPoint for $840 million, or $9.00 per share. That transaction did not close until after the end of the third quarter, so we have not yet seen a post transaction balance sheet.

That's why you have to look beyond the latest financial statements; anyone screening for net/nets at this point would still have Ingram showing. Even after the transaction, though, by my back of the envelope calculation, Ingram should be in the 1.15 times to 1.3 times net current asset value range, but that's a very rough estimate.

The company did spend much of its $1.15 billion in cash to make the acquisition, however, so the composition of the balance sheet will be very different.

The "new" net/net I'm seeing has actually been on the list previously; "a repeat offender" so to speak. Benchmark Electronics (BHE) has been on and off several times over the past few years.

While I'm not ready yet to declare it a "perennial net/net"-- a company that by its nature trades a low multiple to net current assets and, therefore, is not as cheap as it may appear -- it's on my perennial net/net watch list. Benchmark currently trades at 0.99 times net current asset value.

The company ended the latest quarter with $325.8 million or $5.83 per share in cash, and just $10.7 million in debt. Net/nets typically trade at a discount to book value by their nature; Benchmark currently trades at just 0.77 times tangible book value per share.

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