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I screened with Finviz for companies that trade with a Price/Cash ratio of less than 1 and checked if the companies had any debt. I then calculated the net cash (cash - debt). I wrote the part I of an article titled "5 Stocks Trading Below Net Cash" on August 18, the part II on August 19, the part III on August 26, the part IV on August 27 and the part V on August 27. In this article I will feature one China based company and four US based companies. I chose these five companies because they have all reported the second quarter financial results already. Here is a look at the five additional companies that trade below the net cash level currently:

1. QKL Stores (QKLS) is a leading regional supermarket chain company operating in Northeast China. QKL Stores sells a broad selection of merchandise, including groceries, fresh food, and non-food items, through its retail supermarkets, hypermarkets and department stores; the company also has its own distribution centers that service its supermarkets.

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Financials

The company reported the second-quarter financial results on August 14 with the following highlights:

Revenue$83.2 million
Net income$9.6 million
Cash$26.0 million
Debt$7.9 million
Net cash$18.1 million
Shares outstanding12.3 million
Net cash per share$1.47

Outlook

Mr. Zhuangyi Wang, Chairman and CEO, commented on August 14:

"We plan to open 3 additional stores this year. Most of the new stores we will open in the future will be located in the Heilongjiang Province where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other two provinces (Liaoning and Jilin) in which we operate."

"As our new store opening plan modifies from the first half of the year, we believe that preliminary new store opening expenses will decrease in the coming quarters as our total store sales rise, labor & utility costs stabilize and new store marketing expenses ease. For the remaining two quarters of 2012, we believe our gross margin will remain stable in the 17%-17.5% range, operating expenses as a percent of total revenue will move back into the 14%-15% range and we'll return to profitability with net income as a percent of total revenue in the 0.5%-1.0% range."

"As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in the second half of the year and believe we'll see an improvement in operating expenses and profit growth from the current quarter."

My analysis

The stock is currently trading at 44% discount to its net cash per share value. I would recommend buying the shares below the net cash level. I am expecting the company to be profitable for the full-year 2012.

2. RealNetworks (RNWK) creates innovative applications and services that make it easy to connect with and enjoy digital media. RealNetworks invented the streaming media category in 1995 and continues to connect consumers with their digital media both directly and through partners, aiming to support every network, device, media type and social network.

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Financials

The company reported the second-quarter financial results on August 8 with the following highlights:

Revenue$65.5 million
Net income$81.0 million
Cash$282.9 million
Debt$0
Net cash$282.9 million
Shares outstanding34.9 million
Net cash per share$8.11

Second quarter results reflect $120.0 million sale of patent assets to Intel on April 5, 2012.

Outlook

For the third quarter of 2012, RealNetworks expects revenue of $59 million to $62 million. The company expects revenue from Games, Core Products and Emerging Products to decline sequentially and year over year. RealNetworks expects to report a third-quarter adjusted EBITDA loss of $(9) million to $(12) million.

Anticipating significant restructuring activities in the second half of 2012, RealNetworks is not providing full-year guidance for 2012.

My analysis

The stock is currently trading at 1% discount to its net cash per share value. I would recommend buying the shares below the net cash level. I am expecting the company to be profitable for the full-year 2012.

3. Spherix (SPEX) was launched in 1967 as a scientific research company under the name Biospherics Research. The company now leverages its scientific and technical expertise and experience through its two subsidiaries -- Biospherics Incorporated and Spherix Consulting. Biospherics is dedicated to developing and licensing/marketing proprietary therapeutic products for treatment of diabetes, metabolic syndrome and atherosclerosis. Biospherics is exploring new drugs and combinations for treatment of high triglycerides, a risk factor for atherosclerosis, myocardial infarction, and stroke. Spherix's Consulting subsidiary provides scientific and strategic support for suppliers, manufacturers, distributors and retailers of conventional foods, biotechnology-derived foods, medical foods, infant formulas, food ingredients, dietary supplements, food contact substances, pharmaceuticals, medical devices, consumer products and industrial chemicals and pesticides.

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Financials

The company reported the second-quarter financial results on August 13 with the following highlights:

Revenue$0.2 million
Net loss$0.7 million
Cash$4.2 million
Debt$0
Net cash$4.2 million
Shares outstanding4.2 million
Net cash per share$1.00

Upcoming milestones

The company is preparing to submit an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for SPX106T, a combination of SPX-106 and D-Tagatose. Pending FDA approval, ahuman proof-of-concept trial of SPX106T is expected to begin as early as the 4th quarter of 2012. In general, combination therapies have proven to be very effective in treating complex diseases such as cancer, infectious diseases, cardiovascular disease, diabetes and metabolic syndrome because they improve treatment responses and/or minimize development of drug resistance.

Spherix estimates that it will likely take three or more years to complete the studies and clinical trials necessary to attract a pharma partner to complete the development of SPX106T, and an additional two to four years to complete all necessary studies for a New Drug Application (NDA) filing for D-tagatose or SPX106T.

My analysis

The stock is currently trading at 51% discount to its net cash per share value. I would recommend buying the shares below the net cash level. I am not expecting the company to be profitable for the full-year 2012.

4. Spire Corporation (OTCQB:SPIR) is a global solar company providing capital equipment and turn-key production lines to manufacture PV modules.

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Financials

The company reported the second-quarter financial results on August 10 with the following highlights:

Revenue$6.6 million
Net loss$1.8 million
Cash$7.2 million
Debt$1.2 million
Net cash$6.0 million
Shares outstanding8.6 million
Net cash per share$0.70

Outlook

Roger G. Little, Chairman and CEO, commented on August 10:

"Based on recent industry marketing forecasts, we expect the PV equipment market to begin to recover in late 2013 then potentially increasing in global demand extending through at least 2016. As this happens, we believe that we are positioned to capitalize on equipment re-tooling, the growth of regional PV module manufacturing and PV module supply chain transactions. During this quarter, we successfully introduced and delivered our first Spi-Sun SimulatorTM 5600SLP and anticipate sales of this new system to increase as module manufacturers replace older equipment, address measurement needs of high efficiency module technology and expand production."

My analysis

The stock is currently trading at 13% discount to its net cash per share value. I would recommend buying the shares below the net cash level. I am not expecting the company to be profitable for the full-year 2012. The stock has seen insider buying in July 2012.

5. Telik, Inc. (TELK) is a clinical stage drug development company focused on discovering and developing small molecule drugs to treat cancer. The company's most advanced drug candidate is Telintra, a modified glutathione analog intended for the treatment of hematologic disorders including myelodysplastic syndrome; followed by Telcyta, a cancer activated prodrug for the treatment of a variety of cancers. Telik's product candidates were discovered using its proprietary drug discovery technology, TRAP, which enables the rapid and efficient discovery of small molecule drug candidates.

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Financials

The company reported the second-quarter financial results on August 10 with the following highlights:

Revenue$0
Net loss$2.1 million
Cash$8.1 million
Debt$0
Net cash$8.1 million
Shares outstanding1.8 million
Net cash per share$4.50

Ongoing Clinical Trials

TELINTRA Tablets (Ezatiostat HCl, TLK199)

  • Phase 2 Trial in Myelodysplastic Syndrome
  • Phase 2 Trial in Severe Chronic Neutropenia
  • Phase 1 Combination Trial with Revlimid in Myelodysplastic Syndrome

TELCYTA (canfosfamide, TLK286)

  • Phase 2 trial using TELCYTA in MCL, DLBCL & MM

My analysis

The stock is currently trading at 65% discount to its net cash per share value. I would recommend buying the shares below the net cash level. I am not expecting the company to be profitable for the full-year 2012.

Source: 5 Stocks Trading Below Net Cash - Part VI