Market indexes soared Wednesday as investors anticipate an interest rate cut ahead.
The Dow Jones Industrial Average rose 0.7% to a record 26,966, the S&P 500 index gained 0.8% to set a record at 2,995.82, and the Nasdaq Composite index climbed 0.8% to an all-time high of 8,179.23.
The pricey markets have made it difficult for value-minded investors to find hidden gems. Investor enthusiasm has prompted some investors to move their search outside the U.S. almost all together.
Fortunately, the GuruFocus Ben Graham Net-Net Screener roots through the issues on offer and finds ones that come near to the requirements of the founder of value investing.
By the definition of Ben Graham, the founder of value investing, a stock becomes a net-net when its price falls below the outcome of a simple formula: its cash and short-term investments, plus a conservative estimate of its accounts receivable and total inventory, minus its total liabilities (omitting other assets such as land, equipment and intangible assets, and focusing on only liquid and tangible asset value). He called the result “net-net working” capital. Mathematically, his formula looks as follows:
The net-net screener found four such stocks as of Wednesday that may merit further research: TheStreet Inc. (TST, Financial), Nova Lifestyle Inc. (NVFY, Financial), Cannabis Growth Opportunity Corp. (CWWBF, Financial) and IVERIC bio Inc. (ISEE, Financial).
Note: The Ben Graham Net-Net Working Capital Screener extends its reach to stocks that trade between 100-300% of net-net working capital to help generate more ideas, and the stocks from Friday fell into that range.
TheStreet Inc. stock closed up 0.66% to $6.13 Wednesday, near a 10-year low. The financial news and information provider has net-net working capital of $18.57.
TheStreet Inc. has a market cap of $32.710 million, with a price-earnings ratio of 0.47, near a 10-year low, and price-sales ratio of 0.66, near a one-year low.
Nova Lifestyle shares closed up 1.57% Wednesday at 73 cents. The furniture company's net-net working capital is $1.92 per share.
Nova Lifestyle Inc has a market cap of $20.290 million, with a price-earnings ratio of 6.11 and price-sales ratio of 0.30.
The price of Cannabis Growth Opportunity Corp. was flat Wednesday at $1.28 per share. The cannabis investing company's net-net working capital is $2.61 per share.
Cannabis Growth Opportunity Corp. has a market cap of $18.86 million, with a price-earnings ratio of 1.75 and price-sales ratio of 3.43, near a one-year low.
IVERIC bio Inc. closed flat at $1.25 per share Wednesday. The biotech company focused on diseases of the eye has net-net working capital of $2.57 per share.
IVERIC Bio Inc. has a market cap of $51.860 million, with a price-earnings ratio of 0.80 and price-book ratio of 0.47, near a five-year low.
See the Ben Graham Net-Net Screener here.
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