One of Benjamin Graham’s investment strategies was to purchase shares in companies trading at less than net current asset value, also commonly referred to as working capital. The theory behind such an approach is that you are purchasing the company’s most liquid assets at a discount, so if you were to buy the company and liquidate its assets, you would make a profit.
The comments above & below are edited ([ ]) and abridged (…) excerpts from an article by SmallCapPower.com
Graham’s strategy has proven to work so here’s 3 Canadian gold stocks trading at less than net current asset value. (All prices are in Canadian dollars.)
1. Monument Mining Ltd. (TSXV: MMY) – $0.08
> engaged in the mining of gold in the Central Gold Belt District of Peninsular Malaysia.
- Market Cap: $24,022,305
- Revenue (LTM): $30,491,818
- Working Capital: $35,397,942
- Discount to Working Capital: 68%
2. Mangazeya Mining Ltd. (TSXV: MGZ.H) – $0.03
> engaged in exploring for precious metals in the Russian Federation.
- Market Cap: $31,963,714
- Revenue (LTM): $45,438,000
- Working Capital: $35,316,000
- Discount to Working Capital: 91%
3. Minco Gold Corp. (TSXV: MMM) – $0.20
> engaged in the exploration for minerals in China.
- Market Cap: $10,076,821
- Revenue (LTM): $0.00
- Working Capital: $23,379,930
- Discount to Working Capital: 43%
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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