Wednesday, September 17, 2008

CS21 Net/Net Index Update

In the face of all the turmoil in the markets the past few days, we wanted to give an update on the CS21 Net/Net Index; specifically around performance. The Index closed at 115.05 yesterday, up 15.05% since inception (2/12/2008), and is down 5.4% since Friday. No big surprise here. This index is very volatile, and will continue to be volatile. For its part, the Russel Microcap Index is down 1.7% since Friday, and 5.21% since CS21's inception.

Wednesday, September 03, 2008

Profitable Companies Trading Below Net Current Asset Value

As promised, here's the latest list of profitable net/nets. In order to qualify, market cap had to be greater than $20 million, with positive trailing 12 month net income, and the company had to have a "real" operating business. (Therefore, companies such as Zapata (ZAP) and Comdisco (CDCO) did not qualify.) Some of these names, such as Audiovoxx and Lazare Kaplan seem to be perennial net/nets; others are first timers.

Company: AudioVox
Ticker: VOXX
Price: $9.69
Market Cap: $221.46 (million)
NCAV: $242.99

Company: RCM Tech
Ticker: RCMT
Price: $2.71
Market Cap: $34.62
NCAV: $39.29

Company: Nu Horizons Elec
Ticker: NUHC
Price: $4.78
Market Cap: $88.27
NCAV: $131.17

Company: Lazare Kaplan
Ticker: LKI
Price: $7.85
Market Cap: $64.78
NCAV: $71.27

Company: GSI Group
Ticker: GSIG
Price: $4.88
Market Cap: $204.98
NCAV: $264.65

Company:Vicon Industries
Ticker: VII
Price: $5.65
Market Cap: $26.79
NCAV: $26.36*
*reflects increase in price today, company now trades just over NCAV

Company: Flexsteel Inds
Ticker: FLXS
Price: $11.18
Market Cap: $73.52
NCAV: $75.69

Company: Trident Microsystems
Ticker: TRID
Price: $3.05
Market Cap: $186.05
NCAV: $194

Company: Peerless Systems
Ticker: PRLS
Price: $1.87
Market Cap: $33.68
NCAV: $43.67

Company: Gencor Industries
Ticker: GENC
Price: $9.35
Market Cap: $89.88
NCAV: $90.37

Company: Silverleaf Resorts
Ticker: SVLF
Price: $1.87
Market Cap: $71.21

Company: Tegal Corp
Ticker: TGAL
Price: $3.76
Market Cap:$27.31
NCAV: $30.31

Company: Novacea
Ticker: NOVC
Price: $1.83
Market Cap: $47.33
NCAV: $91.53

There you have it. Once again, all these companies are deep into micro-cap land, so use caution, and do your own evaluation. As a postscript, there were some intriguing names with market caps below $20 million; but these were too small for print.

*The author does not have positions in any of the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. The author will not trade any of the securities mentioned (buy, sell, short) for at least two weeks following the date of this post.

Tuesday, September 02, 2008

Volatile Markets Reveal Profitable Net/Nets

If you are a deep value investor, market volatility can be your friend; especially if you fish in the net/net pond. Large swings in the markets tend to punish these underfollowed, less liquid and smaller names.

And most investors have become painfully aware about the historically high levels of market volatility we've been experiencing--as measured by daily market movements greater than 1 percent--through endless financial media outlet barrages. In fact the S&P 500 Index has closed plus or minus 1% in 70 out the 170 trading days so far in 2008, or an amazing 41 percent of the time.

Smaller companies have been even more volatile. The Russell Microcap Index, for instance has finished 78 trading days plus or minus 1% so far in 2008; 35 of those days hace been plus or minus 2 percent. Our own Cheap Stocks 21 Net Net Index has finished more than half--86--of its 142 days since inception plus or minus 1 percent.(Yet CS21 Is up more than 25% since inception, but thats another story)

All of this volatility has revealed an increasing number of profitable net/nets; an area of the market that can be very lucrative for those with time, patience and an iron stomach. In fact, our recent search found more than a dozen profitable net/nets, the most we've seen in years. This initial list, however, needs further scrutiny. Once we've completed our research, and confirmed the data, we'll reveal this list in an upcoming post.