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This thread is devoted to stocks of debt-free companies that are valued so cheaply that the market cap is comparable to the cash on the balance sheet. Here cash is defined as cash plus cash equivalents, including marketable securities. While there's no limit to how low a price/earnings, price/sales, or even price/book ratio can fall, the cash represents a firm floor for a stock price. It's difficult for a stock to trade way below cash, because it would be too easy a takeover target. Moreover, the co. is likely highly motivated to buy back its own shares. Today, in the midst of a bear market when the Russell 2000 has fallen 23% from its peak, there are a number of small stocks trading near, and even below, their cash levels. These are extremely out-of-favor stocks. Typically the stock has been driven down because the business is a mfg. co. in a cyclical downturn or suffering other fundamental problems, yet the balance sheet is so strong that the co. is in no risk whatever of failing. Moreover, you can buy the co. for almost nothing, since the cash is comparable to the market cap. Here's a list of low p/cash debt-free stocks today, based on the latest 10Q. I've limited the list to stocks with a price > $3 and a market cap > $30 M. symbol price market cap cash price/cash cash/rev business CPCI 6 3/4 $33.3 M $35.6 M 0.93 3.3 Q RAID disk drives CNXS 3 13/16 $70.0 M $66.4 M 1.05 5.5 Q anti-snore nose strips ANET 5 1/2 $50.4 M $46.0 M 1.10 3.9 Q frame-relay WAN equip KNTK 6 3/8 $45.3 M $40.7 M 1.11 3.4 Q laser printers MTSN 3 1/8 $45.9 M $40.3 M 1.14 2.6 Q semi mfg equip | ||||||||||||
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