It has been a while since I updated the status of my 2022 Double Net Value Portfolio, an annual tracking portfolio that has had an interesting history, but here it is by popular demand.
Screening criteria for inclusion included the following:
- Companies that trade at between 1 and 2 times net current asset value (NCAV)
- Minimum market cap $100 million
- No development stage medical/pharmaceutical/biotech companies
- Minimum share price $2.00
A very disappointing six of 23 names are in positive territory so far since the Dec. 19 inception and the portfolio is down 16.3%. However, it is holding its own against the Russell 2000 (down 16.25%) and Russell Microcap Index (down 17.94%). Still, it has been a disappointing run this time around.
NOW Inc. (DNOW) (up 33%) is the best performer so far. Richardson Electronics (RELL) (up 30%), which is in second place, has finally broken out and is trading at a 22-year high. Long considered a value trap, Richardson's stock has nearly doubled over the past year. Other positive performers include Avnet (AVT) (up 23%), Intevac (IVAC) (up 21%), Olympic Steel (ZEUS) (up 15%) and Webco Industries (WEBC) (up 7%).
The list of losers is long and includes some real clunkers. Auto sellers Vroom (VRM) (down 86%) and CarLotz (LOTZ) (down 83%) are the worst performers not only this year but in the history of this tracking portfolio. The latter closed half its stores in June in an effort to return to profitability. Rounding out the bottom five are XL Fleet (XL) (down 68%), American Outdoor Brands (AOUT) (down 57%) and VirnetX Holdings (VHC) (down 40%).
"Double-nets" historically have been fertile hunting ground for acquisitions, but it has been a while since we've seen one acquired, and the overall quality of double nets over the past couple years has been subpar. Still, I will keep turning over rocks, looking for gems in this interesting little underbelly of value.
Here's how the remaining names in the portfolio have performed so far:
VOXX International (VOXX) : down 9%
ReneSola Ltd. (SOL) : down 8%
Advanced Emissions Solutions (ADES) : down 27%
Lakeland Industries (LAKE) : down 22%
Immersion Corp. (IMMR) : down 5%
Gencor Industries (GENC) : down 15%
Netgear (NTGR) : down 13%
Flexsteel Industries (FLXS) : down 25%
Acacia Research (ACTG) : down 16%
Exagen (XGN) : down 27%
TrueCar (TRUE) : down 19%
Advanced Emissions Solutions (ADES) : down 27%
With four months to go, we'll see if this portfolio can step up its game.