Monday, June 19, 2006

The Top Ten Net/Nets by Market Cap

We admit, this is not our favorite research to distribute here at Cheap Stocks, but it happens to be popular with our readers. This new list has several new names on it, and your editor still holds LKI and DPII.

What's most interesting about this current list is the fact that most of these companies are cash rich. In fact, four of the ten currently trade at a negative Enterprise Value (OLGC, DPII, INHX, IBPI). Yet, only one is making money, LKI, which trades at 42 times earnings.

The net/net area is still weak these days, (compared to 2001-2003, that is) in terms of sheer numbers of companies trading below NCAV, and in terms of quality. Time was Circuit City, Deb Shops, Ambassadors Intl, Duckwall Alco, Silverleaf Resorts, and GIII Apparel, among others, graced this list. Currently, we are left with primarily unprofitable companies burning through relatively large piles of cash at different frequencies.

Not that we are wanting a longer list--typically, you'll get just that during prolonged market downturns--and we are not advocating such conditions. In the meantime, we'll keep turning over rocks.

Company: Audiovoxx
Ticker: VOXX
Current Price: $12.24
Industry: Electronics
Mkt Cap: $274
NCAV: $322.2
Cash: $178.6

Company: Orthologic Corp
Ticker: OLGC
Current Price: $1.62
Industry: Biopharma
Mkt Cap: 66
NCAV: 70.4
Cash: 73.8

Company: Network Equipment Technologies
Ticker: NWK
Current Price: $2.75
Industry: Biopharma
Mkt Cap: 67
NCAV: 67
Cash: 86.3

Company: Lazare Kaplan
Ticker: LKI
Current Price: $7.97
Industry: Diamonds
Mkt Cap:65
NCAV: 79.6
Cash: 8
See last week’s report

Company: Discovery Partners
Ticker: DPII
Current Price: $2.47
Industry: R&D
Mkt Cap: 65
NCAV: 79.5
Cash: 79.5
See Report

Company: Inhibitex
Ticker: INHX
Current Price: $1.82
Industry: Biotech
Mkt Cap: 55
NCAV: 64.9
Cash: 77.2

Company: Zomax
Ticker: ZOMX
Current Price: $1.52
Industry: Electronic Tech
Mkt Cap: 49
NCAV: 57.2
Cash: 42.9

Company: Qualstar Corp
Ticker: QBAK
Current Price: $3.02
Industry: Electronic Storage
Mkt Cap: 37
NCAV: 42.4
Cash: 34

Company: Strategic Distribution
Ticker: STRD
Current Price: $3.02
Industry: Distribution Services
Mkt Cap: 36.6
NCAV: 39.8
Cash: 79.5

Company: Intrabiotics Pharmaceuticals
Ticker: IBPI
Current Price: $3.52
Industry: Distribution Services
Mkt Cap: 33
NCAV: 48.8
Cash: 48.8

*The author has positions in DPII and LKI. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.

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