Saturday, 17 November 2007

New Life in the Land of the Forgotten: Ranks of Tiny, Profitable Net/Nets Growing

Call us strange, but we believe that a little market volatility can be a good thing. It helps wipe away market excesses, such as those that were the end result of credit that was too easy for too long, and poorly designed and misunderstood securities which have bankrupted many. (Notice, we did not use the “S” word)

We’ve whined for months about the lack of interesting companies—those worth further research—trading below their net current asset value, but recently, the situation has been looking up (or down depending on your reference point). We are beginning to see more profitable net/nets. Most are deep into the microcap space, but beggers can’t be choosers.

The criteria for this weeks net/net list is as follows:
Company profitable on a trailing 12 month basis
P/E ratio less than 50
Market Cap greater than $20 million

Company: Bexil Corp
Ticker: BXLC
Price: $31.15
Market Cap: $27 million
NCAV: $37.8 million
P/E: 42

Company: Forward Industries
Ticker: FORD
Price: $2.71
Market Cap: $21.1 million
NCAV: $24.6 million
P/E: 46

Company: GSI Technology
Ticker: GSIT
Price: $2.30
Market Cap: $65.1 million
NCAV: $66 million
P/E: 12

Company: Eternal Technologies
Ticker: ETLT
Price: $.59
Market Cap: $27.8
NCAV:$48 million
P/E: 4

Company: Atlantic Coast Entertainment Holdings
Ticker: ACEH
Price: $18
Market Cap: $179.4
NCAV: $220 million
P/E: 5
*Currently does not have an operating business, primary assets are cash

Good to see some unfamiliar names. We are also seeing a few other interesting companies that are not curretnly profitable. Perhaps we'll feature these in a furture post.

*Of the companies mentioned, the author has a position in Eternal Technologies (ETLT). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. The author will not trade any of the securities mentioned (buy, sell, short) for at least two weeks following the date of this post.

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