• 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

Updating Net/Nets and Looking at Voxx International

The pool of qualifying net/net companies has continued to shrink.
By JONATHAN HELLER
Jul 12, 2019 | 10:32 AM EDT
Stocks quotes in this article: VOXX, ACTG, FLXS, RELL, KTCC

Investment techniques come and go, but one of my favorites for distressed names, companies trading below net current asset value (or "net/nets") is seemingly on its last legs, at least at this point in the U.S. It is a Ben Graham based technique that I'd devoted an entire website to several years ago. But due to a variety of factors, including rising markets and the recognition of the efficacy of the net/net concept itself which has put the concept more into the mainstream, the pool of qualifying companies has continued to shrink.

At the time of my last (April) column on the subject, there were qualifying nine names with market caps in excess of $50 million, now there are just six. I've retained reams of old net/net searches from years ago when there literally were hundreds of qualifiers, usually, but not always after markets have turned south. This is a different time, but, if and when markets suffer some downside turbulence, we will again see the ranks of net/nets grow.

On Thursday, net/net VOXX International (VOXX)  had a good day, rising 9.5% after reporting first quarter earnings. With no analysts covering the name, there is no earnings surprise story as this is more of an asset story. VOXX, which trades at .84x net current asset value (NCAV), calculated by subtracting total liabilities from current assets. The company ended the quarter with $63 million or $2.60 per share in cash and securities, and $17 million in debt. In addition, due to asset sales, VOXX anticipates that its cash coffers will grow by another $31 million, once its German Accessory Holdings business and Pulheim, Germany real estate assets are sold. The company has announced intentions to repurchase up to three million shares, and is also exploring cash dividends, but the proof of both is in the pudding.

VOXX has been a very disappointing story over the years. It should be trading much higher relative to company assets, and has a current tangible book value of more than $9 per share, while it closed Thursday at $4.50. It has languished in net/net land, and poor performance has drawn the ire of its largest shareholder, Kahn Brothers, which owns about 17% of the company. If you want to see/hear some heated dialogue between Kahn Brothers and company management, check out the Q1 earnings call, or read the transcript. You've got to wonder whether there's an activist fight brewing.

Other current net/nets include Acacia Research (ACTG) , Flexsteel Industries (FLXS) , Richardson Electronics (RELL) , and Key Tronic (KTCC) . More on these in a future column.

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, Jonathan Heller was Long VOXX, RELL.

TAGS: Investing | Markets | Stocks | Trading

More from Investing

Does the Fed Have a Credibility Problem?

Tom Graff
Mar 3, 2021 1:45 PM EST

The Fed is saying they won't hike, but with recent moves in eurodollar futures, the market is saying 'we don't believe you.'

Centene Charts Remain Weak and Vulnerable

Bruce Kamich
Mar 3, 2021 1:35 PM EST

Let's review the charts and indicators.

An Update on the Weakening Trade Desk Charts

Bruce Kamich
Mar 3, 2021 12:55 PM EST

We're in no rush to be a buyer.

Stopped Out on Johnson & Johnson but Willing to Buy it Lower

Bruce Kamich
Mar 3, 2021 12:20 PM EST

Stand aside for now.

Public Service Enterprise Group Stock: Wind at Its Back or Off the Grid?

Bruce Kamich
Mar 3, 2021 11:45 AM EST

Let's check out the charts of the N.J.-based utility.

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

  • 08:50 AM EST PAUL PRICE

    Michaels: Close to a Deal?

    It appears that a deal could be announced soon. ...
  • 08:34 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 3/3/2021

    SPX (Long-Term View) The 20 DMA @ 3889 with the ...
  • 06:05 PM EST PAUL PRICE

    Michael's (MIK) Up on Takeover Rumors

    The NYT says talks are underway regarding a buyout...
  • 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