The net
current asset value approach is the oldest approach to investment in groups of securities with common selection characteristics of which we are aware.
One of Benjamin Graham's analyses is the Net
Current Asset Value approach to uncovering bargain stocks, which finds the minimum value a company would fetch if it were liquidated.
Not exact matches
The implementation of Grahams
approach was performed pretty simply: Annually on Dezember 31, stocks trading below 0.75 times net
current asset value (NCAV) were selected and a diversified portfolio was constructed.
Yet, had you focused exclusively on net nets (Graham's famous
approach whereby one only buys stock in companies where the sum of
current assets less all liabilities exceeds the market
value), you would have cashed in 29.4 % annually in the same period.
The first
approach Graham detailed in the original 1934 edition of Security Analysis (my favorite edition)-- «net
current asset value»: