Who is ValueHuntr?
ValueHuntr is a value investor with a passionate interest 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 was initially on Special Situations investing. However, we have expanded our focus to simply findind cheap companies trading below intrinsic value.
What does the site offer?
1) We have the largest collection of value investing documents on the web.
2) ValueFocus: a monthly value investing newsletter for premium members.
3) ValueEdge: a monthly value investing screen for professional members.
5) 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 tend to meet the following two 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.
Ideally, our companies will meet both criteria set above. However, from time to time, we may also focus on opportunities in risk arbitrage.
1) Market Value below 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.
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.
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.
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