The Ben Graham: Net-Net Newsletter’s May’s picks are two companies in the aviation industry. One sold a division for more than their market cap while retaining two profitable divisions. The second owns 30% of the first and has earnings obscured by a one-time charge.
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This month’s pick:
· Both companies have artificially depressed earnings, when one-time items are removed their income statements dramatically improve.
· Both companies are trading below NCAV.
· One sold an unprofitable division and used the proceeds to eliminate debt firming up their balance sheet. The unprofitable division was sold for more than their market cap at the time.
· The company’s two remaining divisions are profitable and growing.
· -The second company’s controlling shareholder has entered a liquidation phase possibly creating an opportunity for shareholders.
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.
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.
This month’s pick:
· Both companies have artificially depressed earnings, when one-time items are removed their income statements dramatically improve.
· Both companies are trading below NCAV.
· One sold an unprofitable division and used the proceeds to eliminate debt firming up their balance sheet. The unprofitable division was sold for more than their market cap at the time.
· The company’s two remaining divisions are profitable and growing.
· -The second company’s controlling shareholder has entered a liquidation phase possibly creating an opportunity for shareholders.
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.
