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May Ben Graham Net-Net Pick: A profitable company selling for less than net cash
Posted by: GuruFocus (IP Logged)
Date: May 4, 2014 11:16AM

May Ben Graham Net-Net pick is simply too cheap, it’s trading for less than net cash. Their operations are profitable and cash flow generative.

The newsletter is ready for download for GuruFocus Premium Members. If you are not a Premium Member, you are invited for a Free 7-Day Trial.

The Ben Graham: Net-Net Newsletter’s May’s pick is company that owns a cleaning supply retail chain. The company:

  • Sells for 55% of NCAV, and for less than net cash and investments.
  • Their operations have been cash flow generative nearly doubling their cash over the past seven years.
  • Management has been conservative regarding cash use.
  • The company is owned by a majority shareholder and run by the founder’s grandson

Company management is shareholder friendly.

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, download your copy of the Ben Graham: Net-Net Newsletter today

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Re May Ben Graham Net-Net Pick A profitable company selling for less than net cash
Posted by: Dr. Paul Price (IP Logged)
Date: May 5, 2014 06:14AM

Publishing recommendations on penny stocks (this month's pick is listed @ $0.20 per share) is not a good practice.

The bid-ask spread this morning May 5, 2014 is 25% apart @ $0.20 - $0.25. How will the author measure the portfolio performance? I would hope by using the ask, so as not to exaggerate his return.

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