NCAV 2012-2

It has been a long time since the first NCAV update of the year, but this represents the process failing to show up any names that could be added to the Absolute Value/NCAV bucket portfolio (for information on this bucket, and how it works, read here).

As reminder, the initial screen is a valuable tool but from its list of potential positions, a number of names are removed after a simple qualitative overlay.   The conceptual reason for this quantitative overly is ensure that the data used by the NCAV screen as an input is of suitable quality, and that the results are thus meaningful.  A fuller explanation of some of the reasons why names are removed after this qualitative overlay can be found in the earlier update from this year.

The NCAV screen (run on 11/25) produced 2 new positions;
- Imation Corp (IMT), a c$160mn market cap company.  Based on its Q3-12 report, 65% of the company’s Net Current Assets (=Current Assets - Total Liabilities) was $185mn.
- Radioshack (RSH), a $190mn market cap company.  Based on its Q3-12 reports, 65% of its NCAV was $225mn.
As a result, both of these positions were added to the portfolio.

The one existing name in the portfolio (TWMC), no longer qualified for the screen and thus the final date that this name must be sold by was not extended (here are the rules when NCAV names are sold).