Wednesday, July 10, 2013

Stocks Selling Below Cash per Share

Getting Stocks at a Discount

Investors who are looking for turn-around situations in the stock market, yet want to reduce their risk, should look at stocks selling below cash per share. This means (in simple terms) that if you take all the company's cash in the bank, divide it by the number of shares, the result would be higher than what you could buy the shares for. If the company has little or no debt, then if the company went out of business today, you would receive more than what the shares are trading for.

There are several stocks selling below cash per share that have been identified by Obviously, when stocks sell this cheap, there is usually some sort of negative issue associated with it, but if you are a contrarian, you may find a gem in the junk pile.


One example is Emerson Radio Corp. (MSN), the New York Stock Exchange traded marketer of house-ware and consumer electronic products, such as DVD players, microwave ovens, compact refrigerators, clock radios and televisions. The stock, which currently trades at 1.77 per share, sells way below its book value of 2.66 per share, and 18% below its cash per share of 2.15. The company only has $83 thousand in debt. The stock trades at only five times earnings. On the downside, latest quarterly revenues and earnings were down by over 40%. A one time large dividend distribution to the shareholders could send this stock higher. The company has been in business since 1948.


Career Education (CECO) operates colleges, schools, and universities that are in career-oriented disciplines. Its operations include Colorado Technical University and American InterContinental University. Degree and certificate programs are numerous and include technology, criminal justice, computer science, engineering, health sciences, culinary arts, hotel and restaurant management, fashion, interior design, film and video production, and construction. The stock sells at an 18% discount to its cash per share of 4.29. The stocks trades at 3.52, way below its book value of 8.90. Total debt for the company is only $103 thousand. Earnings for the latest reported quarter were negative and the company will report second-quarter 2013 financial results on Wednesday, August 7, 2013, after the market close. This Illinois based company was founded in 1994.

For a free list of over ten stocks trading at or below cash per share, go to The list includes current price, cash per share, debt, P/E ratio, and discount to cash per share. Please keep in mind that although the turnaround percentage gains on these stocks can be huge, the risks are high because of the low capitalizations and usually poor earnings. I hope you find your gem.

Disclosure: Author didn't own any of the above at the time the article was written.


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