Comments on: Ben Graham Net Net Deep Value Stocks

By: How to Invest: Research and Valuation Process | Old School Value

How to Invest: Research and Valuation Process | Old School Value — Wed, 17 Feb 2010 09:39:05 +0000

[...] number and subtract it from my calculation of assets and get a net asset value or otherwise called liquidation value. The rule is to buy the security at 2/3 of that. Also, using liquidation value gives me a floor for [...]

By: PARL Net Net but Business Stinks | Old School Value

PARL Net Net but Business Stinks | Old School Value — Fri, 05 Feb 2010 08:29:13 +0000

[...] has been a net net over the past couple of years and the company just released their 3rd quarterly [...]

By: Portfolio Update January 2010 | Old School Value

Portfolio Update January 2010 | Old School Value — Wed, 03 Feb 2010 08:07:31 +0000

[...] This is the second time entering LTON. The company has fallen back to less than its net net value. [...]

By: Jae Jun

Jae Jun — Fri, 22 Jan 2010 17:40:24 +0000

Made a mistake.
Shareholders equity is net book value while the purpose of NNWC and NCAV is a stricter version of book value. So while you could add retained earnings and paid in capital back into the equation, it would be just be closer to book value.

By: Jae Jun

Jae Jun — Fri, 22 Jan 2010 16:10:43 +0000

@ Troy,

Very interesting thought! Retained earnings and paid in capital is reported under shareholders equity and in the event of a liquidation, I’m sure we would be entitled to some of that. Maybe not all, but at least 50% of shareholders equity should be returned. Meaning, this is a possible inclusion to the net net formula.

Thanks a lot

By: Troy

Troy — Fri, 22 Jan 2010 02:33:31 +0000

Can someone help me with this question?

When we are calculating Net Net Working Capital based on a semi worse case scenario to find an approximate value, why do we not include a fraction of retained earnings and/or paid in capital on the plus side. Theoretically if we are evaluating a company on a hypothetical liquidation situation aren’t the retained earning and paid-in-capital utilized and worth the same as cash?

Net Net Working Capital = Cash and short-term investments + retained earnings + paid-in-capital + (0.75 * accounts receivable) + (0.5 * inventory) – total liabilities

By: Old School Value Screen

Old School Value Screen — Mon, 28 Dec 2009 05:39:58 +0000

[...] based on finding deep value stocks with the stock calculator and Graham’s net net spreadsheet which I modified to include NCAV. [...]

By: Jae Jun

Jae Jun — Wed, 23 Dec 2009 22:41:52 +0000

@ Bob,

Net Net Working Capital = Cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) – total liabilities

By: bob

bob — Tue, 22 Dec 2009 18:49:56 +0000

Question: in your calculation of the liquidating value, are you using Net Net WC – all liabilities?

By: Best 15 Investing Metrics and Ratios List | Old School Value

Best 15 Investing Metrics and Ratios List | Old School Value — Tue, 22 Dec 2009 08:19:36 +0000

[...] Net Net Working Capital. Even better than tangible book value because you adjust the balance sheet items to properly reflect the company. The most accurate liquidation value analysis to date. No one can beat Benjamin Graham when it comes to asset based valuation and balance sheet analysis. 3. Free Cash Flow (FCF) Growth [...]