The net-nets are still out there - actually more of them than I've seen before. I run a screen every month or so that captures all net-nets on the market - usually it runs 2 1/2 pages, and the last six months have been all the same names I've already rejected. I ran it today - bingo - 4 pages, new names. I guess that's what 300 new 52 week lows per day for a week creates.
From there I cull the list down to about 15 based on 1) Have I seen this name here before? and 2) has anything changed with one I considered interesting but not interesting enough to buy before? i.e. has the price fallen another 25%? I found one that looks fantastic. Very very small, but it looks like another Penobscot. Give me two weeks to do a little more homework and buy my shares (its not the most liquid thing in the world), and I'll get back to you. Hopefully Net-net X won't be like the last time I posted something like this, six months ago, when net-net X was Concord Fabrics. I was never able to buy any shares because I wouldn't pay the 1/8 spread, then the thing got taken over for a huge premium.
As for my live net-net picks - further developments on two of them.
1) Elder Beerman. Same store sales up 6% in September. Same store sales had been falling the last few months. That's a big number for such a low valuation. So now I count four catalysts on this net-net ($~7.50 net/net vs. $6 3/8 stock price). Two large holders of the stock pressuring management and providing a floor on the price, a recently announced share buyback, the sale of a business two weeks ago, and now improving fundamentals. It doesn't get any better than this in my book, especially because the shares are liquid enough for institutions to buy and there is an analyst out there pounding the table to buy it. And the stock is only about an eighth above where I first bought it - and three of these four catalysts have developed since then. I've been adding steadily, and still am.
2) Lazare Kaplan (not a net-net any more, but close enough) - showed a little strength this week off the bottom, reports earnings next week I think. These guys are middlemen in the diamond industry. Tiffany is on one side, DeBeers is on the other. Both stocks are in strong uptrends. You want to watch this quarter very very closely if you own the stock or are looking to buy it. The last quarter was not pretty at all.
JJC |
