March 2013 Ben Graham Net-Net Newsletter: Management is intent on returning shareholder value with this British net-net
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The Ben Graham: Net-Net Newsletter’s March 2013 pick is a global OEM hard drive manufacturer.
This month’s pick:
1. The company trades at 66.7% of NCAV.
2. The company had been profitable up until a supply glut pushed them into a loss-making position.
3. Management appears to be capable operators and stated they expect to return cash to shareholders in Q2 2013.
4. The company has €124m in cash, against a market cap of €54.7m.
5. Management expects the company to operate at breakeven in 2013, and be cash flow neutral.
6. The company is pursuing payment from two customers who owe for delivery under contract. It is unknown if a recovery is possible, but it could be a sweetener to the investment.
Download your copy of the Ben Graham: Net-Net Newsletter today
“It always seemed, and still seems, ridiculously simple to say that if one can acquire a diversified group of stocks at a price less than the applicable net current assets alone...the results should be quite satisfactory. They were so, in our experience, for more than 30 years.”- Ben Graham
What’s a Net-Net?
A net current asset value bargain—or net-net—is a stock selling for less than the value of its current assets—cash, receivables, and inventory—minus all liabilities. Basically, it’s a stock selling for less than its liquidation value.
What’s the Ben Graham: Net-Net Newsletter?
GuruFocus’s Ben Graham: Net-Net Newsletter is written by Nate Tobik. It picks one new net-net every month. The newsletter goes out to subscribers on the first Friday of the month. The newsletter looks for stocks that have both a tangible margin of safety and reasonable upside potential.
So, get your copy of the Ben Graham: Net-Net Newsletter today.