Here is a list of 10 UK stocks selling at 30% or less than their stated net tangible asset value AND at 20% or less than their debt to equity excluding intangibles.
They also have strong balance sheets with a current ratio of 1.50 or more.
This is not a recommendation to buy or sell any of these stocks and please do your own research.
For example when you dig deeper in to some of these stocks they really are very crap indeed but that is to be expected when looking at deep value stocks from a quick screen.
Without further ado here is a list of 10 UK bargain basement stocks:
1. Auhua Clean (LSE: ACE)
Vital stats: debt to equity 0.05, price to tangible book 0.01, current ratio 4.80
Auhua is headquartered in Jinan City, Shandong Province, China and is a solar heater manufacturer that has since built up a brand name and patented technologies.
The fact that Auhua is a Chinese stock will put a lot of investors off due to the well-documented fraudulent activities of Chinese businesses and as a rule I discard them as soon as they are identified.
Let’s move on.
2. B.S.D Crown Di Company (LSE: BSD)
Vital stats: debt to equity 0.00, price to tangible book 0.27, current ratio 28.96
From their website: ‘B.S.D Crown is an Israeli public limited company listed on the London Stock Exchange which until recently, was focused on mobile technology and software. The Company has been seeking new opportunities in various sectors and on 4 May 2014, completed the acquisition of a controlling stake in Willi-Food Investments, a food importer based in Israel.’
Seems as if this is a business still trying to figure out what it wants to do.
3. Gulfsands (LSE: GPX)
Vital stats: debt to equity: 0.11, price to tangible book 0.25, current ratio 1.75
This oil and gas producer has been hammered by the recent oil price collapse but has massive asset backing and good balance sheet strength. The last time it reported positive earnings was in 2011. Notably it has oil exploration and development projects in the Syrian Arab Republic (currently suspended owing to sanctions), and oil and gas exploration projects in Morocco, Tunisia and Colombia.
4. GTS Chemical (LSE: GTS)
Vital stats: debt to equity 0.19, price to tangible book 0.03, current ratio 2.12
From their website: ‘GTS Chemical Holdings plc was incorporated in Jersey on 22nd January 2014. GTS’s operating subsidiary, Shandong Tiantai Steel-Plastic Co., Ltd was incorporated in China on 16 March 2005 as a limited liability company’
Our second Chinese stock which puts it in a risk category all of it’s own.
5. Inch Kenneth (LSE: IKK)
Vital stats: debt to equity 0.00, price to tangible book 0.08, current ratio 23.92
An exceptionally strong balance sheet with hardly any liabilities whatsoever and a lot of assets tied up in PPE for this Malaysian rubber producer.
No company website but trawling through their newsfeed highlights negative earnings, high cost of sales and high administrative expenses.
6. Orosur Mining (LSE: OMI)
Vital stats: debt to equity 0.14, price to tangible book 0.25, current ratio 1.93
Orosur Mining is a South American gold producer, developer and explorer that has posted positive earnings in three out of the last four years.
No doubt Orosur’s share price has been influenced by the price of gold that lists almost half of it’s assets as exploration and evaluation costs. The CEO recently purchased 200,000 shares taking his total to 723,000 representing 0.75% of the company.
7. Powerfilm Regs (LSE: PFLM)
Vital stats: debt to equity 0.14, price to tangible book 0.10, current ratio 17.83
PowerFilm is a leading global developer and low cost high volume manufacturer of thin-film solar products and modules.
Powerfilm has proposed and will seek shareholder approval for the cancellation of it’s listing on AIM due to the cost and logistics of AIM compliance, a lack of liquidity that distorts the value of it’s shares and negligible access to capital from being listed on AIM.
8. Rapidcloud (LSE: RCI)
Vital stats: debt to equity 0.04, price to tangible book 0.05, current ratio: 8.10
A perennial bargain stock, Rapidcloud is one I crashed out of due to some very questionable accounting issues. Rapid cloud is a provider of cloud computing, web hosting, online business services and professional IT services to clients within Malaysia and Southeast Asia that has posted positive earnings if you believe what they say.
9. Resource Holdings (LSE: RHM)
Vital stats: debt to equity 0.13, price to tangible book 0.12, current ratio 2.66
Resource Holdings is a Malaysian company registered in the Cayman Islands that used to operate a media and advertising business but changed it’s status to an investing company in April of this year. It currently has £2.75 million to put towards it’s investing strategy and has posted positive earnings every year for the last four years.
10. Tethys (LSE: TPL)
Vital stats: debt to equity 0.03, price to tangible book 0.23, current ratio 6.46
Tethys is a bulletin board darling oil and gas producer focused on Central Asia and the Caspian Region with projects in Kazakhstan, Tajikistan and Georgia. It is focused on renegotiating the terms of its loan agreements with third parties as a result of a strategic review. Earnings are negative but the balance sheet strength is compelling.
Walter Schloss made buying these types of stocks famous and he achieved great success over the years buying literally hundreds of these types of businesses and holding them for long periods of time.
Walter Schloss’ Investment Record
Following this type of strategy requires more than just using a screener but using one is a great way to start the research process to find true deep-value stocks to make up a sufficiently diversified portfolio.
For more information about this type of strategy take a look at the posts: