Tuesday, December 23, 2008

Cash Rich Companies

There is actually quite a few companies that are trading below their net cash per share.

SO in theory this could happen:
  • Own the company by buying all the stocks in the company for say $1
  • Sell off all the assets and get the cash
  • This amount ( the net cash) is higher than $1, so..say $2
  • You pocket the $1
However this does not happen, because the big boss in the company will not sell all their shares to you.

Hence you can start looking into this companies for long term investment, as it does not make sense for the company to trade below its net cash for a long time. ( That is provided the company does not start losing all its money over the next few years.)

Here is the list of such companies

source : Bloomberg

source : shareinvestor.com

1 comment:


Lots of companies are rolling in cash.