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Interesting List of Companies Trading Below TBV While Growing Revenue


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A couple of months old but still an interesting post by The Aleph Blog:




One of my rules of thumb in equity investing is that if I buy companies trading below tangible book value,  with earnings yields over 10%, it is difficult to lose value, and the odds favor gaining value.


But there are some caveats:


Analyze the balance sheet, highly indebted companies are not to be trusted, but that varies by industry.


Longer dated assets, like property, plant & equipment should be discounted.


Banks and REITs must be scrutinized carefully, because of their weak liability structures.


Foreign companies need extra scrutiny, because the disclosures are often not as good.  This goes triple for Chinese companies.


Make sure you are not investing in a “buggy whip” industry, particularly in the era of the internet.  How can your company be disrupted?



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Corning (GLW) is on the list.


1. I would expect lots of special glass for screens. Someone posted the concept video showing glass computer screens everywhere.


2. Fibre optic cables design has changed substantially since the dot com boom.  How long before the original fibre has to be replaced with the new designs? How long before the fibre is extended to homes and offices. With all the mobile devices won't the replacement and build-out both have to start soon?


No position.

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