Comments on: Negative Enterprise Value Stocks for 2010

By: Jae Jun

Jae Jun — Fri, 09 Jul 2010 06:46:50 +0000

@ Dom,
Yes that is the formula for excess cash that I used in following posts.

By: Dom

Dom — Thu, 08 Jul 2010 18:59:08 +0000

In your excess cash formula you assume that the company has some amount of excess cash. Wouldn’t a better formula be:

Excess Cash = MAX(0,Total Cash – MAX(0,Current Liabilities-Current Assets))

As I’ve written it the formula will result to “0″ for companies that have no excess cash whereas your formula will generate a negative number (the excess cash shortage). Or should we include the cash shortage?

For example I was reading Joe Ponzio’s article on JTX. If I run your excess cash formula for the year ended 4/2009, I get negative $41 million. With my formula, it calculates to zero. Which is right?

By: zehua

zehua — Sat, 10 Apr 2010 02:47:31 +0000

Hi Jae,
I see many of your stocks in the neg. enterprise value are actually foreign stocks. I doubt if the currency conversion is correct, because stocks like IMOS seem to have far more debt than cash.

Thanks,
Zehua

By: Negative Enterprise Value Stock Screen Strategy

Negative Enterprise Value Stock Screen Strategy — Fri, 26 Mar 2010 14:02:09 +0000

[...] not surprised that negative EV stocks perform well overall given that even my random set of neg EV stocks beat the market last year. But over a span of 9-10 years, the result is mind blowing. Negative Enterprise Value [...]

By: Jae Jun

Jae Jun — Tue, 16 Feb 2010 04:29:18 +0000

1. Total cash is cash and equivalents.
2. Yes you are correct.

By: Carl

Carl — Mon, 15 Feb 2010 19:06:20 +0000

I have a question about the formula on Excess cash. Does total cash means Cash flow from operation ? 2nd, if current assets is greater than current liabilities then Excess cash = Total cash – 0 ?

By: Weekend Reading Links – January 3, 2010 | Finance Blog

Weekend Reading Links – January 3, 2010 | Finance Blog — Thu, 07 Jan 2010 06:22:08 +0000

[...] Old School Value presented Negative Enterprise Value Stocks for 2010 [...]

By: Weekly Wisdom Roundup #59 (Weekly Readings For Smarter Types) | Economic models | Alphaverse.com

Tue, 05 Jan 2010 07:01:56 +0000

[...] Negative Enterprise Value Stocks for 2010 – Via Old School Value – Since enterprise value accounts for debt and subtracts the excess cash from the equation, if the formula above results in a negative number, the conclusion is that the company is loaded with excess cash, hence a cash rich company trading for less than it’s value. [...]

By: Jae Jun

Jae Jun — Mon, 04 Jan 2010 16:32:10 +0000

I didn’t use the yahoo screener this time.
Used the NYT screener. Found that it had more stocks in the database as it included OTC stocks as well.

By: SMD

SMD — Mon, 04 Jan 2010 16:24:00 +0000

Hi Jae

Ran the Yahoo screener using the criteria set out in your March email but results are different than those posted above (both in population and enterprise value). Grateful if you could explain the discrepancy.