Who is ValueHuntr?
ValueHuntr is an individual investor with a passionate interest in value investing, particularly in special situations within the small and nanocap world.
What is the site’s focus?
At ValueHuntr, we believe that Ben Graham’s Value Investing principles present a rational roadmap for investing. Our focus is on Special Situations investing.
What does the site offer?
1) We have the largest collection of value investing documents on the web.
2) Through Value Focus, our monthly value investing newsletter, we inform our subscribed members (premium members) on topics and investing plays that may be of their interest.
3) We keep track of investing opportunities that may be of interest to our readers through our ValueHuntr Portfolio.
What’s our portfolio criteria?
The companies we prefer will generally meet the following criteria:
- A market value significantly below intrinsic value, with particular emphasis on companies with negative enterprise value.
- A catalyst with a high probability of realization in the near future.
- A company of “secondary” nature, with little to no following on Wall Street.
Ideally, our companies will meet all of the criteria set above. However, from time to time, we may also focus on companies that do not meet one or more of these guidelines if we feel it is an idea worth writing about to inform our readers.
1) Market Value below Intrinsic Value
(Sub-Intrinsic Value)
In general, all of our picks are likely to be below our estimates for intrinsic value, including intangible elements of the balance sheet for companies with a strong competitive advantage. Though our analysis focuses on the balance sheet, we will also focus in earnings power, but only for those businesses likely to consistently sustain/improve their comprehensive earnings in the long term.
(Sub-Asset Value)
We pay particular attention to companies that are, for one or several reasons, selling at a price below their net asset value, defined as the value obtained by subtracting the company’s total liabilities and commitments from the working capital. In rare occasions, this may include companies below liquidating value.
(Sub-Liquidating Value)
This is one of our favorite segments of the Special Situations investing we like to engage on. In legal terms, the liquidating value is considered the minimum value a company is worth because, if worst comes to worst, owners could realize this value by liquidating the business. In a number of instances, companies selling below liquidating value have had disappointing past records. Either they have lost money or they have earned less than enough to justify a price equal to at least the net asset value. If the business could not earn enough to support its liquidating value, ordinary prudence would suggest that it be wound up or disposed of and that the sale value or liquidating value be turned over to shareholders.
2) A catalyst with a high probability of realization
There is no guarantee or law of market action by which the price can be counted upon to adjust itself eventually to its intrinsic value. Therefore, our focus is on companies with active shareholders who insist management take steps to improve the company’s situation so that it will be worth at least as much as the stockholders could realize through its sale or liquidation.
3) A secondary stock
We define a secondary stock as one having no claim to fame, prominence, or general popularity. Hence, it is likely to be ignored by the stock market generally and left for dead at a time when the disparity between price and intrinsic value may in fact be greatest.
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