NEW YORK ( TheStreet) -- It's unlikely that you'll find any references to the term "double net" in the financial media. That's because it's a term that I invented a few years ago. Leave it to a deep-value guy to come with such a crazy-sounding term.But double net is certainly not rocket science. It's a concept that describes companies trading at a relatively cheap multiple of net current assets, in this case at between one and two times net current asset value. You may recall that companies trading at less than one times NCAV are referred to as net/nets, a deep-value investment concept developed by Ben Graham, the father of value investing. Double net takes that concept one step further. Net/nets are few and far between these days, which is typical when markets are generally heading higher. Double nets may be the next-best thing in small-cap deep-value land in terms of potential opportunities. In a sense, they are the "minor league" of sorts for net/nets. When looking for ideas in double net land, I utilize the following criteria:
- Market cap is greater than $250 million; U.S.-based and trades on a major exchange; Trades at between one and two times NCAV (defined as current assets minus total liabilities from the most recent quarter) Not a financial company.
AVX ( AVX), which manufactures electronic components, is next up. With a market cap of $1.58 billion, AVX is trading at 1.42 times NCAV, about 14 times trailing earnings and just under 12 times the 2014 consensus estimate. AVX also has a very solid balance sheet -- a fairly common occurrence with double nets -- and ended its most recent quarter with $837 million, or $4.94 a share, in cash and short-term investments. There's an additional $254 million, or $1.50 a share, in long-term investments on the books.