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Totally agree with that. You want to see a stable share count.
NCAV Value stocks - Ben Graham
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Totally agree with that. You want to see a stable share count.
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ORS Octagonal Resources, qualifies.
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was doing a bit of value searching today:
According to gurufocus:
CSR has a graham number of $3.67 whilst its currently @ $3.18 - note it also has a piotroski f score of 9
BEN has a graham number of $12.48 whilst its currently @ $10.52
gonna look further into them tomorrow
According to gurufocus:
CSR has a graham number of $3.67 whilst its currently @ $3.18 - note it also has a piotroski f score of 9
BEN has a graham number of $12.48 whilst its currently @ $10.52
gonna look further into them tomorrow
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I get $3.56 for CSR and $14.58 for BEN, or thereabouts.
CSR f score = 7 in my book...but as good as a 9 (I don't like a couple of the piotroski definitions...e.g. it misses out on a "1" because it has zero, rather than reducing debt).
Anyway - my main reason for replying was just to alert anyone following along who is not quite familiar with this stuff...the "Graham number" is not the NCAV that is being discussd / posted on in this thread.
CSR and BEN would never qualify under NCAV.
CSR f score = 7 in my book...but as good as a 9 (I don't like a couple of the piotroski definitions...e.g. it misses out on a "1" because it has zero, rather than reducing debt).
Anyway - my main reason for replying was just to alert anyone following along who is not quite familiar with this stuff...the "Graham number" is not the NCAV that is being discussd / posted on in this thread.
CSR and BEN would never qualify under NCAV.
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Systematic, I take it that the performance of ONC has not escaped you. Since you first mentioned it on here back on 20 March 2015, ONC is up 150% - and this is in a market that is down almost -4.5% for the year.
ONC is a great case study of why the NCAV strategy is so surprisingly effective. If you have a portfolio of net-nets - say more than 10 but probably not more than 30 (a number that you'd be hard pressed to find across the world's exchanges anyway) - you only need a couple of stocks to perform like ONC to achieve superior returns.
My apologies!! Will keep looking at your thread and watch none the less
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STO is not a net-net. MGX is a strong net-net because it is currently trading for below the amount of cash and long term deposits on its book.
MGX has cash/cash equivalents and term deposits of $334 million and total liabilities of $106 million.
MGX's current market cap is $191 million. That means theoretically that, if you liquidated MGX tomorrow and paid off all its liabilities, you would get the inventory, property, plant and equipment for free and still walk away with $37 million cash in your pocket.
But before considering MGX as a potential investment, you must first work out what its cash-burn rate is. This is especially important with a highly capital intensive industry like mining which is what MGX is in. I have not worked out MGX's cash-burn rate but looking at its most recent balance sheet, I can see that it is not negligible.
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Once you buy a net net or ncav how long are you supposed to hold it for? I have not read grahams book for years!
I coded a couple of algorithms in Quantopian and noticed that the sample size is incredibly tiny; finding a portfolio of stocks less than 66% is practically impossible. I ended up loosening the criteria to rank stocks according to distance below ncav and then purchasing the top 20.
After my experiment I am starting to doubt the backtests that I have seen as I can't get close to replicating their results (most likely they have made a mistake like not dealing with delisted securities properly). There are periods of market beating returns but when applied to an indiscriminate group drawdowns are severe (more so than other common quantitative value strategy's).
I coded a couple of algorithms in Quantopian and noticed that the sample size is incredibly tiny; finding a portfolio of stocks less than 66% is practically impossible. I ended up loosening the criteria to rank stocks according to distance below ncav and then purchasing the top 20.
After my experiment I am starting to doubt the backtests that I have seen as I can't get close to replicating their results (most likely they have made a mistake like not dealing with delisted securities properly). There are periods of market beating returns but when applied to an indiscriminate group drawdowns are severe (more so than other common quantitative value strategy's).
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That's a tough question. Theoretically, it is until the market cap rises at least back up to NCAV. But of course if the company's NCAV deteriorates, it is probably as soon as possible.
Are you searching only in Australia? There are hardly any worthy net-nets here. Try Japan or Hong Kong.
The research on the outperformance of a net-net strategy has been tested and re-tested for 40 years or more. The results are clear: it is a market-beating strategy.
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You guys don't also crack the annual reports open to see close up?
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Always.
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Top 5000 US stocks according to market cap (2002 onwards).
I agree it is market beating.
However in my backtests drawdowns were around 85% in 08/09 erasing gains over a long period. Performance was also highly dependent on the start date chosen (compounding returns tend to run away if stocks went up early).
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Used to but not so much anymore!
Ended up choosing time over accuracy (but thats another discussion)
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GRR Grange Resources (yes, just another mining company - that's pretty much all we get here) qualifies as it touches 8.6c.
Think it qualified extremely briefly as an NCAV a few months back (like for a day or two). Probably one of (if not the) biggest market cap / liquid Australian companies mentioned thus far on the thread. And although a miner, it's one of the few posted that have earnings, cash flow etc (has even paid dividends) and a few other "quality" metrics. Like all NCAV's though, it's a long-term play...the current momentum indicates a poor outlook in the near term.
As it's January, if I were an NCAV investor I might wait for annual reports to come out. Maybe. Possibly not though (surprises can be part and parcel of these strategies).
Think it qualified extremely briefly as an NCAV a few months back (like for a day or two). Probably one of (if not the) biggest market cap / liquid Australian companies mentioned thus far on the thread. And although a miner, it's one of the few posted that have earnings, cash flow etc (has even paid dividends) and a few other "quality" metrics. Like all NCAV's though, it's a long-term play...the current momentum indicates a poor outlook in the near term.
As it's January, if I were an NCAV investor I might wait for annual reports to come out. Maybe. Possibly not though (surprises can be part and parcel of these strategies).
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KAR Karoon Gas qualifies.
I've often not bothered posting another mining/energy/biotech company; but mention this one as it's by far the biggest NCAV company I've seen on the ASX.
I've often not bothered posting another mining/energy/biotech company; but mention this one as it's by far the biggest NCAV company I've seen on the ASX.
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With all net-net resource stocks, you are best to work out their cash-burn rates. If they are using up more cash than they are generating, they will need to borrow or to raise equity. Thereafter, in either case, they are unlikely to remain net-nets.
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Thanks Rainman. Yeah, same goes for the cash intensive pharma's. I can't remember where I read it (or if I dreamed it)...that Graham wouldn't be looking for these stocks among these types of companies.
That's why there's not much to report lately. 99% of the time there are only resource/energy/health care companies that come up. Hardly ever a consumer stock etc.
Any further insights on whether you'd invest in these sectors or not?
As per previous thoughts - I think to invest in these I'd go global. More opportunities to build a portfolio. The side effect of going global would also mean you could be just a little more selective about stuff like which sectors etc.
That's why there's not much to report lately. 99% of the time there are only resource/energy/health care companies that come up. Hardly ever a consumer stock etc.
Any further insights on whether you'd invest in these sectors or not?
As per previous thoughts - I think to invest in these I'd go global. More opportunities to build a portfolio. The side effect of going global would also mean you could be just a little more selective about stuff like which sectors etc.
