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Look Beyond Latest Financials When Screening Net/Nets

If you trust your data too much, and don't look any further, you might also believe that Sycamore Networks (SCMR) is back in net/net land again. But that company paid a huge $10 special dividend after the end of the latest quarter in early October and announced last week that it will pay another $2 special dividend, and then sell off its remaining assets. Bye-bye Sycamore.

The other net/nets with market caps in excess of $100 million are very familiar, at least in net/net land. They include FormFactor (FORM - Get Report), Imation (IMN - Get Report), Targacept (TRGT), Westell Technologies (WSTL) and Trans World Entertainment (TWMC). Targacept and Westell have not yet reported their latest quarterly results, so the data is as of June 30.

That leaves RadioShack (RSH) , the most high-profile net/net, which is all but hated by the Street, and presumed to be a "value trap" of the highest magnitude. I'm probably among the very few that still believes the company is worth more than its current price; but there is great risk here, and it's not for the faint of heart.

Overall, the dark world of net/nets is downright boring at this point.

At the time of publication the author was long IM, RSH.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. 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.

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RSH $0.31 12.76%
FORM $9.16 0.00%
IM $25.65 0.00%
IMN $4.16 0.00%
AAPL $130.28 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

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