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As the broad markets continue to plow forward, the deep-value net/net cupboards (companies trading below net current asset value) are becoming even more bare. I did not think that was possible; indeed, I've never seen an environment quite like this one for net/nets, and I feel a bit like a broken record for saying so again. What's more, it has not been a great environment for small value for the year to date, with the Russell 2000 Value and Russell 2000 Microcap indices down 0.5% and 1.6%, respectively. In such an environment, I'd expect to see more companies to be jettisoned to net/net land.
My latest perusal of current net/nets revealed just eight with market caps greater than $50 million. When you throw out the early-stage biotechnology companies that will burn through the cash on their books (which technically helps them qualify for net/net status), that leaves just four.
FreightCar America (RAIL) tops the list and is the only name with a market cap in excess of $100 million. The company has seen some tough times lately, as earnings have disappointed the past couple quarters and orders are not very strong. What is strong, however, is the balance sheet, and it should see the company through to better times.