Friday, June 19, 2009

There are Still Stocks that are Trading Below Cash

After the stock market rise from March, you might think that any stocks that had been trading below their cash per share would have made their move and would now be trading above cash. Not so. has just updated their list of over 35 stocks that are trading below their cash per share and have market caps above $100 million.

The cash per share is calculated by taking all the cash in banks of the company and dividing that number by the total shares outstanding. So if the company has $10 million in cash, and has 1 million shares outstanding, the cash per share is $10. If the stock trades for $5, then the Cash per Share Price ratio would be 2. The higher the number, the bigger the discount.

In this example, if the company went out of business today and had no debt, all investors would double their money plus receive a pro rata share of the sale of all the other assets of the company. In a way, it almost creates a base or floor for the price of the stock, because eventually the company will be noticed by either investors who will buy shares of the stock driving up the price or other companies who will attempt a take-over of the company.

Some of the companies that show up on the list include:

Enstar Group Limited (ESGR), which settles insurance and reinsurance claims, recently traded at 57.88 and has cash per share of 162.84, giving it a cash to share price ratio of 2.81. The company has a market cap of 778.5 million, with a forward PE of 6.51. They do have $392.7 million in debt.

American Railcar (ARII) which makes and sells hopper and tank railcars, trades at 7.59 per share and has cash per share of 13.74, giving it a cash to share price ratio of 1.81. The company has a market cap of $161.7 million, with a forward PE of 95.12. Their debt level is 275.0 million.

Wellcare Health (WCG) a managed healthcare services company, trades at 18.45 per share and has cash per share of 28.62, giving it a cash to share price ratio of 1.55. The company has a market cap of $ 779.0 million, and a forward PE of 8.11. They have 152.4 million in debt.

To see all the other stocks that are trading below cash, several of which are debt free, and at least one of which pays a dividend, you can download a free Excel database of Stocks Trading Below Cash at

By the way, one of my readers asked me what source I use to come up with this list. The answer is, I am the source. I start with searching for stocks using general categories, such as market caps over $100 million. I then go line by line through the list of stocks and calculate the cash divided by the price per share to get the cash per share price ratio (sometimes I calculate the share price per cash ratio), then I sort by highest to lowest ratio.

When going through this list, be careful of the financial and investment companies, since the amount of cash for the financials is generally much higher than the cash balance of other sectors.

Author does not own any of the above.



TFMA said...

Cash is king in these types of markets. Please do not try and use gold as a hedge, you would have to figure the acutal rate of return once you subtract inflation and taxes. Don't forget that the market does have an average return of 12% over the last 60 years.


James said...

I have tried to access the database at WSNN.Com several times with negative results. I am not sure if it is the site or me.


Stockerblog said...

I just tried and it works fine. If it still doesn't work, try