Thanks for your reply. I came to understand NetNet must be some kind of cash after debt while profitible screen- though I did not delve far enough in history to confirm.
On initial inspection, NPK's cash level suggested to me poor management. Especially if it's been at such a level for a period of time. If management can't find a manner to invest cash in a way that exceeds cost of capital, well...
It was an honest question, though the durable nature of their primary line of business would disqualify them IMO at this point in time.
It might be that some small caps remain small caps over long periods of time because of managment choices. In some lines of business, that may be an appropriate choice, but for those I would expect a return in the form of dividends exceeding treasury yields by some arbitrary risk premium, as there isn't much chance for capital gain.
At 6% yield, NPK is close to meeting that requirement, and may make a good play for improved consumer activity in light of lower taxes on the horizon, possibly lower energy costs and lower interest rates. Your info re TGT is news that would have to be evaluated in that context. I'd probably compare them to Salton.
Another parameter I've monitored, is the level of insider ownership and executive compensation. Some of the companies the scan turned up have insider ownership of 71% or better. While I like some insider ownership, I've noted in some cases that with this much control, it's not uncommon for the minority shareholders to be ignored. Not true in all cases, but a risk.
I appreciate you sharing the results of your scan, but I'm surprised that so few companies made the bar. |
