James Altucher Trading Below Cash is a bargain investing strategy loosely based on an approach described by US investor and writer James Altucher in his book, Trade Like Warren Buffett. This is a deep value strategy that Altucher found was highly effective in periods of market distress. He acknowledged that stocks that are priced at less than the value of their cash present a challenge to investors. It is difficult to get an accurate view of how much cash is actually in a business, plus they may have broken business models or dis-incentivised management. The strategy looks for stocks with a market cap below cash, low debt, sufficient cash to cover the annual burn-rate and some stability in revenues and earnings. Altucher wrote: "There is always the danger that management doesn't care about the shareholders but instead enjoys sitting on the assets of the company and using it for their personal benefit. Diversification is the tool that we can use to reduce the risk of corrupt, or at best, uncaring, management.? more »
The Market Cap is a measure of a company's size - or specifically its total equity valuation. It is calculated by multiplying the current Share Price by the current number of Shares Outstanding. It is stated in Pounds Sterling.
Stockopedia explains Mkt Cap £m...
Market Capitalisation only takes into account the value of the company's shares (equity), it ignores the amount of debt a company may have taken on and therefore isn't the best indicator of the company's size. The Enterprise Value adds the net debt to the Market Cap and is a better indicator of the minimum amount that an acquiring company may have to pay to buy the firm outright.
The higher the ratio, the greater risk will be associated with the firm's operation. In addition, high debt to assets ratio may indicate low borrowing capacity of a firm, which in turn will lower the firm's financial flexibility. Like all financial ratios, a company's debt ratio should be compared with their industry average or other competing firms.
Companies with high debt/asset ratios are said to be "highly leveraged". A company with a high debt ratio could be in danger if creditors start to demand repayment of debt.
Diluted EPS figure indicates the earnings per-share a business would have generated if all stock options and other sources of dilution that were currently exercisable are taken into account. This version has been normalised to exclude exceptional income and charges, better reflecting underlying results
Sales (also known as revenue ) tell you the dollar amount of goods and services a company sells. This is important because it indicates the amount of money being brought in as a result of the customers' desire for whatever the company is selling.