Definition, Strategy, and NCAVPS Formula Explained
What Is Net-Net?
Benjamin Graham’s Net-Net investing strategy evaluates a company’s stock using net current assets per share (NCAVPS) to uncover undervalued opportunities. This approach emphasizes cash and cash equivalents, deducts adjustments for accounts and inventories, and excludes long-term assets, focusing purely on immediate liquidation values. Understand this method for identifying investment prospects within undervalued stocks.
Key Takeaways
- Net-net is a value investing strategy pioneered by Benjamin Graham that focuses on a company’s net current assets, excluding long-term assets and liabilities.
- The strategy identifies stocks trading below 67% of their net current asset value per share as potentially undervalued…
