Finding Opportunities in companies worth less than their net cash
The market often presents an opportunity for investors to purchase shares in a company valued less than their net cash value (cash and cash equivalents minus total debt). From a book value lens, these companies might look undervalued on a liquidation basis, but do they always turn out to be good investments?
In the Jenga Briefing attached below, we explore this question by studying the past and analysing the returns of previously below cash companies. We also identified two market regions of excessive fear given the number of below cash companies and include a case study from a current Jenga portfolio company.