There are a couple of "repeat offenders" back in double-net land (companies trading at between 1 and 2 times net current asset value or NCAV). In fact, both were part of my 2019 Double Net Value Portfolio, rose out of those ranks, and are now back.
Footwear maker/wholesaler/retailer Rocky Brands (RCKY) (which qualified for my October-released Triple Net Passive Portfolio) is down 22% year-to-date, and while off it's low, has not completely recovered from pandemic-related woes. Currently trading at 1.58x NCAV, the company did get a 35% boost after reporting better than expected second quarter results on July 29th (33 cents versus 16-cent loss consensus), but quickly gave back some of that gain.
RCKY trades at 10x next year's "consensus" estimates (just one analyst covers the name), and currently yields 2.46%. The company's balance sheet is fairly solid. RCKY ended its latest quarter with $25.8 million or just over $3.50 per share in cash, and no debt. It currently trades at 1.23x tangible book value. RCKY generates the bulk of its revenue (66.4% in 2019) from wholesale, with the balance from retail (24%) and military (9.6%).
The other new (old) kid on the block is Olympic Steel (ZEUS) , which currently trades at 1.78x NCAV. Shares are down 37% year-to-date. Second quarter revenue was down a whopping 42% year/year, the deadly combination of lower selling volume and lower prices, as industrial names and automaker demand for metals suffered at the hands of the pandemic.
The consensus (just two analysts) expects a rebound in 2021 to the tune of 51 cents, which implies a forward price earnings ratio of 22.5. The one analyst weighing in on 2022 is forecasting an even better year (EPS of $1.43) which has a two year forward PE of 8. Of course, as we are all painfully aware, a lot can happen in a short period of time, let alone two years. ZEUS' balance sheet is light on cash ($7.1 million last quarter, but par for the course with this company), and heavier on debt ($198 million), which is to be expected for a metal products company. The company maintains a 2-cent quarterly dividend, and currently yields .7%.
One of the last new/old double net I profiled, watch name Movado (MOV) , is up slightly (+8%) since that column ran, and currently trades at 1.49 X NCAV. Sometimes the value wheels move very slowly.
