After the market closed today I ran a quick CapIQ screen: -Listed on major US exchange -Non-financial -Net working capital less total debt > market cap I got about 230 results. While most of these are probably garbage value traps, my point is that stock pickers have to be licking their lips. “A value investor is a contrarian with a calculator.” -Seth Klarman
Post the list!
Try this: 1) Net = Cash and Short-term Investments + (0.75 * Accounts Receivable) + (0.5 * Inventory) - Total Liabilities 2) Market Cap > $100 MM Then Net/MCAP > 1 Post a list of you can, or a trend if you see it!
Is that a direct quote from Margin of Safety?
Isn’t this that whole EVA methodology? I have CIQ and I’ll post the list tomorrow… …no, no, no I won’t. Willy
An AIG would also make the list if they didn’t take impairment on their assets. BE CAREFUL…
PTrainer- I should have used FactSet! I agree completely that for the vast majority of these, there is a reason they are trading so low and it’s important to be careful (Think Crocs and Dana [which should no longer be on the list because they drew down on their revolver]). I excluded financials to avoid AIG type hits. Any other advice?
ValueAddict- The Klarman quote was something he said at the Graham & Dodd Breakfast at CBS earlier this week. It doesn’t sound familiar from Margin of Safety but it may have been in there as well. How is Security Analysis coming along? I took the opposite approach and started with the new Buffett bio but the 6th Edition behemoth is waiting for me. Something tells me that it will be valuable to read, but will be a test of will to get through the whole thing.
soma80 Are you a student a Columbia? Makes sense. I don’t recall it from M.O.S. because I think I would have remembered a phrase like that. (or at least hope) I made it half way through Security Analysis - very labor intensive. AND it is a test of will. Its nothing like the Intelligent Investor in terms of readability. So I decided to take a breather and hit the equity section after I finished a few MBA apps. In the meantime I started on the new Buffett book because its a much lighter read.
How is that Security Analysis book - I just ordered it. Looks awesome. If Buffett says this: “A road map for investing that I have now been following for 57 years.” --From the Foreword by Warren E. Buffett about a book - I can’t not get it . . .
Barrons found TRID this weekend and said it is trading @ < cash. Keep an eye on it monday - I saw NAPS featured in the same column months aog and it recently got gobbled up by BBY for a sick premium
soma80 Wrote: ------------------------------------------------------- > After the market closed today I ran a quick CapIQ > screen: > -Listed on major US exchange > -Non-financial > -Net working capital less total debt > market cap > > I got about 230 results. While most of these are > probably garbage value traps, my point is that > stock pickers have to be licking their lips. > > “A value investor is a contrarian with a > calculator.” > -Seth Klarman Funny I did the same screen except I used cash per share as a percent of price per share. Some interesting names popped up on that list. Homebuilders are trading at around cash levels, but the burn rate is really high.
I’m very glad to see that there are other value guys on AF. equity_analyst, are you on the buy-side?
add more categories of criteria: net net working capital- off balance sheet obligations(including underfunded pension , environmental charges or legal settlement) > 0 cash burning rate< 10%/year earing or free cash flow>0 power of major shareholders > that of management probability of take-over, asset sale, spin-off, share repurchase,liquidation or firing CEO>50% and see how many stocks left and then post the result.
interest coverage > 5x