Net net

Definition

Net-Net
Net-net valuation is a conservative investment technique originating from Benjamin Graham’s methods. This approach determines a company’s value by subtracting all liabilities from its current assets, focusing only on liquid and near-liquid assets such as cash, receivables, and inventories. Investors then identify stocks trading below this net-net value, indicating a significant discount relative to the company’s immediate asset base. The method is designed to minimize risk by emphasizing tangible value rather than uncertain future earnings. It is especially useful in screening distressed or cyclically challenged companies. By purchasing securities at prices lower than their net current assets, investors seek to establish a robust margin of safety and potential for substantial capital appreciation upon market correction

See also