I'm pleased to see that last week's crazy market volatility created some movement in Deep Value Land, generating two new "net/net" or "double-net" stocks with market caps in excess of $100 million -- something I haven't seen in ages. As of Friday, Voxx International (VOXX) was a net/net (a stock that trades below its net asset value), while widely hated Fitbit (FIT) was double-net firm (a name that trades at 1x to 2x net asset value).
Let's check them out:
VOXX was a perennial net/net stock years ago, although it was then known as Audiovoxx. The firm has gone through some major changes since then, but recently dropped back into Net/Net Land (a place no stock would go by choice).
The stock is down about 40% since October and traded at 0.98x net current asset value and 0.54x tangible book value as of Friday's close. As is typical for net/nets, there's little analyst coverage, but VOXX ended its latest quarter with $46.5 million in cash and securities (or $1.92 per share vs. to just $17 million in debt.
Fitbit is back in "Double-Net" Land.
A member of last year's Double-Net Value Portfolio, FIT was trading at 1.98x net current asset value as of Friday's close, but continues to disappoint. Hopes were high for its new Ionic smartwatch, but investors aren't buying into the story.
However, Fitbit remains cash-rich, with no debt and $659 million (or $2.81 per share) in cash and short-term investments as of the firm's latest reported quarter. The fact that FIT is trading at just over $5 and the company has so much net cash tells you that investors expect little if anything for the company, and that the stock is trading more like an option.
We'll know more when Fitbit reports fourth quarter earnings on Feb. 22. Consensus estimates (a fairly large consensus for a company of this size) are calling for about a one-cent-per-share fourth-quarter loss on $588 million of revenues. FIT has much to prove -- and if there was ever a make or break quarter, this might be it.
Meanwhile, Corning Is a 'Dividend Champion'
Finally, one thing that was lost amid all of the recent market volatility is the fact that Corning (GLW) last week quietly announced another dividend increase, hiking its payout by more than 16% to 18 cents a share.
Corning has effectively doubled its dividend over the past five years, taking the stock's indicated dividend yield to 2.5%. But after a solid run over the past couple of years, the stock has pulled back some 16% since reporting fourth-quarter earnings in late January.
Add it all up and GLW is quietly becoming a "dividend champion."
(Editor's note: An earlier version of this column incorrectly stated that as of Friday, FIT was a "net/net" stock -- a name that trades at less than 1x net asset value -- but it was actually a "double-net" firm, or one that trades at 1x to 2x net asset value.)