• 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
    • Bruce Kamich
    • Doug Kass
    • 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

4 Stocks to Fish in the Deep Value Pond

Searching for value plays produces few options, right now.
By JONATHAN HELLER
Jul 11, 2016 | 11:00 AM EDT
Stocks quotes in this article: CDI, RELL, MLNK, TWMC, SHOS

A weekend search for net/nets (stocks trading below net current asset value) yielded the smallest and sorriest list of candidates that I've ever seen. There were just six names with market caps greater than $100 million, and 15 above $50 million. Of those 15, 10 were biotech companies, which technically qualify as net/nets from a formula perspective only (current assets less total liabilities; if this is below current market cap, it makes my list). However, I don't even look at these companies further, given the fact that they are typically development stage, losing money, and the major asset is cash, which they are likely burning through.

That leaves just five net/nets, the largest of which is Sears Hometown and Outlet Stores (SHOS) . I've had mixed success with retail net/nets over the years, and concluded that this one is even too ugly for me.

The remaining candidates include:

1. Trans World Entertainment (TWMC) : The entertainment retailer operates about 300 stores, and its primary brand is FYE (For Your Entertainment). Most of these are mall based stores -- not exactly a hot area these days. it currently trades at 0.86x net current asset value, has about $3 per share in cash, and is marginally profitable.

2. CDI Corp (CDI) : The engineering and staffing solutions company, which was hurt badly due to oil and gas industry staffing exposure, has bounced nicely since late January. It currently trades at 0.98x net current asset value but is not profitable.

3. Richardson Electronics (RELL) : RELL trades for just above net cash: It has nearly $5 a share in cash and short-term investments, currently yields 4.5%, and trades at 0.61x net current asset value. This one, which has been a disappointment since I've owned it, is not currently profitable. Given its startling level of liquidity, however, RELL might make a nice acquisition candidate.

4. ModusLink (MLNK) : This currently money-losing company, which was formerly internet incubator CMGI, trades at 0.93x net current asset value, and below net cash. MLNK ended its latest quarter with $166 million, or $3 a share, in cash and short term investments, and $81 million in long-term debt. Recent management shakeups have put Chairman of the Board and activist investor, Warren Lichtenstein, in as interim CEO. Last month, the company unveiled a plan to restore profitability. While I recently initiated a position, it seems that the markets remain skeptical.

There you have it: A rather thin list of choices in net/net land. It's not easy being a value investor, these days.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider MLNK and RELL to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

At the time of publication, Heller was long RELL and MLNK, although positions may change at any time.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investing | U.S. Equity | Stocks

More from Investing

Bearish Bets: 3 Stocks You Should Consider Shorting This Week

Bob Lang
Jul 3, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Let's Shine a Light on Lucid Motors as It Slides Downhill

Brad Ginesin
Jul 2, 2022 1:00 PM EDT

LCID's market cap has been deflated, so is it now a bargain, or can it slip further?

Stop Wishing, Hoping and Praying and Take Control of Your Investing

James "Rev Shark" DePorre
Jul 2, 2022 10:00 AM EDT

The most powerful thing an investor can do is embrace the idea that they don't know what the future holds.

If You've Got Time, These Three Dividend Aristocrats Should Pay Off

Bob Ciura
Jul 2, 2022 7:30 AM EDT

There high-growth dividend stocks will be here over the long haul.

Welcome to Second Semester on Wall Street, Here's How to Make the Grade

Jim Collins
Jul 1, 2022 4:36 PM EDT

Think you can own big tech? You might just get an 'F' for that. Here's what will get you on the other side of this year.

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

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • 04:41 PM EDT PAUL PRICE

    First-Half Results - Putrid; Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 mark...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 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