The Top Ten Net/Nets by Market Cap

by: Jon Heller, CFA

We admit, this is not our favorite research to distribute here, but it happens to be popular with readers. This new list has several new names on it, and I still hold LKI and DPII.

What's most interesting about this current list is the fact that most of these companies are cash rich. In fact, four of the ten currently trade at a negative Enterprise Value (OLGC, DPII, INHX, IBPI). Yet, only one is making money, LKI, which trades at 42 times earnings.

The net/net area is still weak these days, (compared to 2001-2003, that is) in terms of sheer numbers of companies trading below NCAV, and in terms of quality. Time was Circuit City, Deb Shops, Ambassadors Intl, Duckwall Alco, Silverleaf Resorts, and GIII Apparel, among others, graced this list. Currently, we are left with primarily unprofitable companies burning through relatively large piles of cash at different frequencies.

Not that we are wanting a longer list. Typically, you'll get just that during prolonged market downturns, and we are not advocating such conditions. In the meantime, we'll keep turning over rocks.

Here they are:

Company: Audiovoxx (NASDAQ:VOXX)
Current Price: $12.24
Industry: Electronics
Mkt Cap: $274
NCAV: $322.2
Cash: $178.6

Company: Orthologic Corp (OLGC)
Current Price: $1.62
Industry: Biopharma
Mkt Cap: 66
NCAV: 70.4
Cash: 73.8

Company: Network Equipment Technologies (NASDAQ:NWK)
Current Price: $2.75
Industry: Biopharma
Mkt Cap: 67
NCAV: 67
Cash: 86.3

Company: Lazare Kaplan (LKI)
Current Price: $7.97
Industry: Diamonds
Mkt Cap:65
NCAV: 79.6
Cash: 8
See last week’s report

Company: Discovery Partners (DPII)
Current Price: $2.47
Industry: R&D
Mkt Cap: 65
NCAV: 79.5
Cash: 79.5
See Report

Company: Inhibitex (NASDAQ:INHX)
Current Price: $1.82
Industry: Biotech
Mkt Cap: 55
NCAV: 64.9
Cash: 77.2

Company: Zomax (ZOMX)
Current Price: $1.52
Industry: Electronic Tech
Mkt Cap: 49
NCAV: 57.2
Cash: 42.9

Company: Qualstar Corp (NASDAQ:QBAK)
Current Price: $3.02
Industry: Electronic Storage
Mkt Cap: 37
NCAV: 42.4
Cash: 34

Company: Strategic Distribution (STRD)
Current Price: $3.02
Industry: Distribution Services
Mkt Cap: 36.6
NCAV: 39.8
Cash: 79.5

Company: Intrabiotics Pharmaceuticals (IBPI)
Current Price: $3.52
Industry: Distribution Services
Mkt Cap: 33
NCAV: 48.8
Cash: 48.8

Disclosure: The author has positions in DPII and LKI. This is neither a recommendation to buy or sell this security.