Skip to main content

NEW YORK (TheStreet) -- The search for deep value is never-ending: even in the current environment where it is getting difficult to find many companies that are indeed cheap. That means that you have to turn over even more rocks in order to find something of interest.

As I reported last week, my favorite deep value technique, companies trading

Bottom Feeding for Deep Value Success Is Rare but Possible

, is not revealing a great deal of opportunity these days. The overall rising tide of the markets has lifted most boats higher, and as a result, the net/net cupboard is nearly empty at this point.

Read: MannKind Talks Down Insider Selling While Executives Sell Shares

That has certainly happened before, perhaps not to the current extent, but when it does, I often relax my search criteria a bit in order to identify the next best thing. That involves the identification of what I call "double nets," or companies trading at between one and two times net current asset value. Often, these companies become net/nets during market corrections, so it is good to know what names are on the precipice of falling below net current asset value.

When identifying double nets, I utilize the following criteria:

  • Market cap is greater than $250 million
  • Companies are U.S. based and trade on a major exchange
  • Trades at between one and two times net current asset value (NCAV; defined as current assets minus total liabilities from the most recent quarter)
  • Financial companies are excluded.

At this writing, there are 30 names that make the cut; the fewest I seen in the several years that I've been studying double nets. As is typical, the list is very heavy on semiconductor and other technology related companies.

Read: Higher Interest Rates Impact Expensive Metro Areas

At the top of the list in terms of market cap at $3.4 billion, is a very familiar name,

Ingram Micro


which seemingly always trades at a relatively low multiple to net current asset value. Ingram has had a good year, up 31%. Ingram trades at 1.41 times net current asset value, and 9 times 2014 consensus earnings estimates. Yesterday shares fell 4%, and it is not uncommon to see double nets hit harder than the broader markets during market declines.

Image placeholder title


Scroll to Continue

TheStreet Recommends

data by


Electronic components name


(AVX) - Get AVX Corporation Report

is the second largest double net with a market cap of $2.16 billion. Currently trading at 1.64 times net current asset value, AVX has a solid balance sheet, ending the latest quarter with $1.04 billion, or $6.18 per share in cash and short-term investments. Shares trade just under 16 times 2014 consensus earnings estimates, and yield 2.7%.

Image placeholder title


data by


Other technology related names companies that made the cut include


(SNX) - Get TD SYNNEX Corporation Report


Tech Data

(TECD) - Get Tech Data Corporation Report


Benchmark Electronics

(BHE) - Get Benchmark Electronics Inc. Report


Electro Scientific Industries

(ESIO) - Get Electro Scientific Industries, Inc. Report

; which along with Ingram Micro, are the components of my

Small Technology BITES Portfolio Update


Non technology qualifiers include tobacco name

Universal Corp

(UVV) - Get Universal Corporation Report

, retailers




West Marine



PC Connection




(SYX) - Get Systemax Inc. Report

, business services name



and auto parts manufacturer

Superior Industries

(SUP) - Get Superior Industries International Inc. (DE) Report


At the time of publication the author is long IM, ESIO, RSH.

Follow @JonMHellerCFA

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.