An early read suggests that Black Friday was a roaring success, with ShopperTrak reporting a 6.6% increase in sales and a 5.1% increase in foot traffic. While the holiday shopping season appears to be off to a decent start, it will be interesting to see how it goes from here given the country's very high 9% unemployment rate.
But for value investors who have had it with all things shopping, I am hereby renaming Cyber Monday as Net/Net Monday. It just so happens that that the market pullback over the past month, which sent the S&P 500 down nearly 10% and the Russell 2000 and Russell Microcap Indices down nearly 13%, has bolstered the number of net/nets (companies trading below their net current asset value).
Most of the names are very familiar, and have previously qualified as net/nets but were knocked off the list due to rising markets. Ingram Micro (IM) is a net/net yet again, and among the larger companies that you are likely to see on the list with its $2.75 billion market cap. Ingram is currently trading at 0.95x net current asset value (NCAV), just under 11x trailing earnings, and has just over $1 billon, or $6.50 per share, in cash.
Boating supplier West Marine (WMAR), which I mentioned last week, has also returned to net/net land. Given last week's 10% pullback, the company opens this week trading at 0.95x NCAV, and 8x trailing earnings. The next two quarters are typically not profitable for West given the seasonality of its products, and the company will no doubt burn through some of its $44 million in cash on the way to the 2012 boating season. However, West is in better shape than this time last year, when it had $37.5 million in cash.
Athletic footwear company K-Swiss (KSWS) has returned to net/net land with a vengeance. Shares are down more than 40% since the beginning of November, when it reported third-quarter numbers that were much worse than expected. The company, which trades in the $2.60 range, has $1.05 per share in net cash, so far has been unable to get back on track and put up a profitable year since the last recession began. K-Swiss currently trades for 0.63x NCAV, and 0.53x tangible book value per share, but has a very difficult road to run to return to profitability.