Net Nets

Hi there,

I have understood the net nets investing strategy as buying those securities that are trading at a price less than 2/3*(Current Assets-Total Liabilites)/Shares Outstanding. How can I find all such stocks in the USA using your free screener?

Thanks,
Siddhartha

Stocks Discussed: 
Alibaba Health Information Technology Ltd (ALBBY)

Submitted by Sidlaw. Created on Thursday 11th May 2023. Updated on Thursday 11th May 2023.

Submitted by GrahamValue on Wednesday 24th May 2023

Dear Siddhartha,

Thank you for your comment!

Intrinsic Value is the price corresponding to a stock's Graham Grade: Defensive, Enterprising or NCAV.

A stock selling under two-thirds of its NCAV — or having an NCAV or Net-Net(%) exceeding 150% — on the free Classic Graham Screener, would have a Graham Grade of Ungraded.

Such stocks will not have a positive EPS (TTM) as Graham required. Only the Advanced Graham Screener will show stocks clearing all Graham requirements.

The positive EPS requirement is a qualitative check for NCAV stocks.

Stocks with Graham Numbers and NCAV figures exceeding 70% can be detected by the Classic Graham Screener, except when the stock also clears the qualitative criteria for that specific grade and therefore has an actual Intrinsic Value greater than 70%.

Intrinsic Values on GrahamValue are marked Zero for Ungraded stocks. This has also been covered in the Frequently Asked Questions (FAQ). You may also find this older discussion helpful.

Thank you again for your comment!

Update

A closer review of the preceding conversation appears to indicate that the source of the miscommunication is the use of the terms "all" and "except".

So to clarify completely, the free Classic Graham Screener will show most stocks but not the best ones as explained above; so not all stocks.

Apologies for the miscommunication! Please see the below code to understand exactly how the grading flow works.

Submitted by Sidlaw on Sunday 28th May 2023

So to be double sure before deploying capital, I want to ask my question again-
If I want to find all stocks selling below 2/3 NCAV in USA (or any other geography), what should I use and with what filters?

Thanks,
Siddhartha

Submitted by GrahamValue on Sunday 28th May 2023

Dear Siddhartha,

Thank you for your comment!

The above production source code shows the actual flow of assigning the Graham Grade and Intrinsic Value to each stock, and should give complete clarification on the process.

Here is how it applies to your specific requirement.

One can find stocks that are selling under two-thirds of their NCAV on either Graham Screener using:

NCAV or Net-Net(%) ≥ 150%

But the free Classic Graham Screener limits Intrinsic Values to 70%, so some stocks with NCAV or Net-Net(%) ≥ 150% may not show up on it. This may be be sufficient for you if you don't care about getting all such stocks.

The Advanced Graham Screener, however, will show all such stocks in GrahamValue's database. The filters in Search vs Classic vs Advanced will show how many stocks with Intrinsic Values exceeding 70% are available across countries and exchanges.

Please keep in mind that some stocks with a Graham Grade of Defensive or Enterprising could have NCAV or Net-Net(%) ≥ 150% as well. Whether they will show up on the free Classic Graham Screener depends on the Intrinsic Value assigned to them.

Again, Graham did not actually recommend the two-thirds NCAV criteria for his readers.

Thank you again for your comment!

Submitted by Sidlaw on Saturday 3rd June 2023

Hi there,

Thanks for clarifying.

This means that I can sign up for Advanced Graham Screener and put NCAV or Net-Net(%) ≥ 150% to get all stocks selling at less than 2/3 NCAV. Is that right?

Submitted by GrahamValue on Saturday 3rd June 2023

Dear Siddhartha,

Thank you for your comment!

Yes, that's correct. NCAV or Net-Net(%) ≥ 150% on the Advanced Graham Screener will show all such stocks regardless of Intrinsic Value or Graham Grade.

But there are already 373 such U.S. stocks on the free Classic Graham Screener. If that does not fulfill your requirements, you could consider the Advanced Graham Screener which shows 442 such U.S. stocks.

Please note hat these numbers are subject to change, and have not been individually checked for Fiscal Years etc. But the point is that there are plenty of such stocks already on the free Classic Graham Screener.

Thank you again for your comment!

Submitted by Sidlaw on Tuesday 4th July 2023

Hi there,

When I try to pay, it says that "This seller doesn't accept payments in your currency". Can you help me to make the payment?

Thanks,
Siddhartha

Submitted by GrahamValue on Tuesday 4th July 2023

Dear Siddhartha,

Thank you for your comment!

If your card is being declined by PayPal, here are some possible causes and solutions. For other Personal Support Queries, please use Messaging or Email.

Thank you again for your comment!

Submitted by Sidlaw on Thursday 6th July 2023

Hi there,

Paypal wants to know which currecny do you want the money in?

Also, PayPal says that they can't help me with this error. Is there any alternative mode of payment that I can use?

Thanks,
Sid

Submitted by GrahamValue on Thursday 6th July 2023

Dear Sid,

Thank you for your comment!

GrahamValue also accepts Bitcoin as payment for the Advanced Graham Screener.

For more detailed discussions on payments, please use the Email contact option.

Thank you again for your comment!