stocks trading below liquidation value. oversold below cash heldNet net or cigar butt investing is a form of deep value hunting. Stocks so beat up, the market cap is below the value of the assets on the balance sheet. Even trading below the cash on the balance sheet. So beat up, the market is pricing the stock as worth more dead than alive.
I thought it was just a thing that happened in history book, or in the depression days. But apparently Im wrong. It happens even today.
There are probably hundreds of net net cigar butt stocks at varying degrees of oversold or beat up levels. Some are losing money, some are not so much. The market just isnt interested in the accounting value in the business's balance sheet. How can that be so in a efficient market? So many of the large companies are priced perfect and looking to the future. But this tiny micro caps arent seeming to price an accurate today.
Cigarbutts
Digging in the trash for almost free value-Net Net Cigar ButtsBenjamin Graham taught Warren Buffett his Net Net liquidation value stock strategy. Graham would hunt for stocks that were so cheap that there was more value in the company if they stopped operations and passed out the assets. Net liquidation value was higher than the price of the whole company. Graham learned this from the hard times of the depression years, but the concept still applies to companies today.
Disclaimer: Small cap penny stocks are highly risky and will lose you money. This is not advice or any recommendation to buy, you will lose money.
CEAD ARVL CENN