Well here we are. It’s new years eve and I am starting my first blog. The idea of this blog is to highlight very, very cheap stocks usually, though not always, of the net net variety. Often these stocks are micro caps however I will also cover larger companies from time to time.
Other bloggers are picking their stocks for 2012 and while I usually avoid exercises of this kind it certainly makes for an interesting first post.
Of course my two picks are net nets currently found on the UK market.
French Connection ( FCUK.L ) currently available to purchase at 40p is capitalised at just under £40m and sports £30.9m cash, or 31.83p per share, on its balance sheet which is debt free. Other net current assets ( current assets less all liabilities ) equals 24p per share. Therefore working capital, or a proxy for liquidation value, comes in at 55.83p per share. The FCUK brand in itself is worth something and this brand as well as other fixed assets and the going concern value are currently valued at minus!
Titon Holdings ( TON.L ) is a micro cap worth just under £3.5m at an offer price of 33p per share. Trading has been tough as is the outlook. Obviously this, as well as poor business economics, has driven the price south. TON holds 26.81p per share cash on its balance sheet and very minimal debt ( a £17,000 overdraft ). Other net current assets come to 26.57p for a working capital figure of 53.38p. Cheap isn’t it ? But there’s more: under the fixed assets there’s depreciated freehold property worth 23.4p per share!
Both companies pay a dividend as well.