Net/nets sometimes appear to be cheap, but aren't; some may be on their last legs, and ultimately on the way to bankruptcy. In making that determination, balance sheet quality is an important factor. Since current assets are integral to the calculation, they should be scrutinized and evaluated. For instance, you would place a much higher value on cash and short-term investments than on inventory and receivables. While the value of the former two can be known with certainty, inventory must be sold and receivables collected in order for their values to be realized and there are no guarantees there. All else being equal, I'd be more interested in a net/net with ample cash than gobs of inventory.
Systemax is expected to report first quarter earnings on May 6. There are just two analysts covering the stock and the "consensus" is calling for earnings of 5 cents per share. For now, the company is on my radar.
At the time of publication the author held no positions in any of the stocks mentioned.
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