Mr Deep-Value's Substack

Mr Deep-Value's Substack

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Mr Deep-Value's Substack
Mr Deep-Value's Substack
A US stock trading at 70% of net-cash value

A US stock trading at 70% of net-cash value

It's also been FCF positive in 6 of the last 7 years.

May 17, 2025
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Mr Deep-Value's Substack
Mr Deep-Value's Substack
A US stock trading at 70% of net-cash value
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Every once in a while, a stock comes along that checks all the boxes that deep-value investors secretly pray for:

  • Trading near or below net cash.

  • Deeply hated by the market.

  • Tangible (liquid) assets.

  • Optionality from a product pipeline no one is paying attention to.

Here are some quick stats to illustrate the current pricing:

  • NCAV Ratio = 0.8

  • TBV Ratio = 0.7

  • EV/E Ratio = <1 (EV is negative)

  • P/FCF Ratio = 8

Today’s stock is currently a net-net. It’s priced below even the value of its net-cash. The market gives zero value to its business, or even its Dollar bills.

This indicates a very simple assumption:

This business will never make any money again, while incinerating all of its cash in the process.

Our job is to figure out how likely this is versus the likelihood of it reverting back to its mean of profitability over the coming years.

Let’s take a look…

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