• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Transportation

Here's Hoping More 'Double-Net' Value Stocks Are Netted in Acquisitions

Benchmark Electronics, FreightCar America, Kulicke & Soffa and AVX Corporation are on my radar as potential targets.
By JONATHAN HELLER
Apr 28, 2017 | 11:00 AM EDT
Stocks quotes in this article: SALE, AVX, BHE, RAIL, KLIC

Typically, once you've identified a cheap name, it takes the markets quite some time to catch on, assuming that you were correct in the first place. Either way, it can be a bit like watching paint dry or grass grow.

Such is the case with former double-net stock (a stock trading between 1x and 2x net current asset value) RetailMeNot (SALE) . It's an online coupon company that was in double-net territory last year when it was trading in the mid-$7 range and I believed was a potential acquisition candidate.

RetailMeNot shares rose to the $12 level from there, lifting the name out of double-net land, a place no company would be by choice. The shares then slid back to about $8 in March, and SALE was once again a double net, with about $4.50 per share in cash. He who hesitates is lost, and before I could put pen to paper again, it was announced a couple weeks ago that the company agreed to be taken private for $630 million, or $11.60 per share.

Not exactly a great success story, considering where shares were trading over the summer, but it still was another double-net that was acquired. The RetailMeNot deal comes on the heels of a significant amount of double-net acquisition activity last year, including Ingram Micro in February, Rofin-Sinar Technologies in March, and Skullcandy over the summer.

I'm surprised there have not been more double-net acquisitions in this market environment, especially among double-nets that are flush with cash. The other candidates I mentioned last June -- AVX Corporation (AVX) and Benchmark Electronics (BHE) , up 48% and 28%, respectively since that June column -- remain double nets.

Others that I had hoped for included FreightCar America (RAIL) and Kulicke & Soffa (KLIC) . FreightCar America has struggled, even making its way into net-net land (trading below 1x net current asset value), and now trades at 1.06x net current asset value. Kulicke & Soffa, on the other hand, has prospered, with its shares up more than 80% since September. KLIC now trades at 2.5x net current asset value, still a relatively cheap valuation, but out of double-net land.

Kulicke & Soffa not has only been putting up better-than-expected earnings results, but also stands to benefit from tax reform. With much of the company's cash held offshore, shares theoretically are more valuable if the company had the ability to repatriate cash at much lower tax rates than are in place at present. It is unclear how much of that, if any, is already priced in.

In future columns, I'll endeavor to identify more potential double-net acquisition candidates.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Heller was long RAIL and KLIC.

TAGS: Investing | U.S. Equity | Technology | Industrials | Basic Materials | Transportation | Consumer Discretionary | How-to | Mergers and Acquisitions | Stocks

More from Transportation

As Plug Power Plummets, There Appears to Be More Risk Ahead

Bruce Kamich
Feb 25, 2021 2:03 PM EST

Let's check out the PLUG charts as traders react to the latest EPS numbers.

Luminar Technologies Is Likely to Give Back All of its Gains

Bruce Kamich
Feb 24, 2021 12:28 PM EST

Let's look at the charts and indicators.

The Sagas of a Cruise Operator and a Burger Joint Continue

Jonathan Heller
Feb 24, 2021 10:00 AM EST

Carnival Corp. continues to sell debt and equity as it works to stay afloat, while Steak n Shake deals with problems of its own.

Careful, the Rally in XPO Logistics Has Stalled

Bruce Kamich
Feb 23, 2021 10:44 AM EST

Let's check out the charts.

Here's What's Drawing Me to a Speculative Trade on Forum Merger Corp III

Timothy Collins
Feb 22, 2021 1:42 PM EST

FIII is the buyer of urban delivery van firm Electric Last Mile Solutions.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:31 PM EST PETER WILLSON

    Has the Short-Term Top Come for the XLF/Banks?

    The has triggered a long-term overbought signal ...
  • 10:10 AM EST GARY BERMAN

    DLTR: The Buck Might Not Stop Here, but I Am Looking for a Bounce

    Dollar Tree is trading inside our long-term boun...
  • 08:36 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 2/24/2021

    SPX (Long-Term View) The 2/16 HIGH @ 3950.43 is ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login