Audiovox Corp (NASDAQ:VOXX)

NikkoStone (< 20) Submitted: 4/25/2013 1:15:47 PM : Start Price: $9.91 VOXX Score: +5.99

I think this is the unique type of investment

OklaBoston (< 20) Submitted: 3/25/2013 3:02:16 PM : Start Price: $10.68 VOXX Score: +2.85

Recently filed for a secondary offering which will help reduce the debt load, and insiders have been buying on the open market lately.

Book value of $33.69 gives this plenty of upside potential.

EnigmaDude (97.23) Submitted: 5/15/2012 1:14:41 PM : Start Price: $13.30 VOXX Score: -41.10

Net sales for the fiscal year ended February 29, 2012 were $707.1 million, an increase of 25.9% compared to net sales of $561.7 million in the comparable year ago period.

And $900M projected for FY2013.

Diagoras (94.54) Submitted: 7/5/2011 11:17:16 PM : Start Price: $7.53 VOXX Score: +20.79

I'm still researching this company (and its industry) more before I buy it in real life, but it is trading below working capital (and near a liquidation value of said working capital), and has positive free cash flow. Its brands and revenue streams still need looking into, but they should be able to offer the company decent profitability.

daddycswhite (57.72) Submitted: 1/6/2011 7:28:36 PM : Start Price: $8.13 VOXX Score: +4.36

Way overdue.

Ak66 (29.68) Submitted: 11/13/2010 4:04:55 PM : Start Price: $6.51 VOXX Score: +30.19

Cheap. Much more upside than downside as it seems the stock has over-realized fear in its current price. A weighted gamble.

IF it does take off, it could take a long time.

LEXLUTH0R (93.49) Submitted: 9/29/2008 12:04:09 PM : Start Price: $9.21 VOXX Score: -27.08

Another ride on the Voxx express to high 9s

FRRElement (98.66) Submitted: 4/2/2008 12:20:03 AM : Start Price: $11.16 VOXX Score: -29.51

With the use of Audiovox as an example I would like to introduce a Theory of Benjamin Graham's, , which Seth Klarman has named Net Net Working Capital. The theory is rather simple but very complicated to implement.

Here is the Formula

Net Net Working Capital = Total Current Assets – Total Liabilities

What one is trying to do with such an investment tactic is buy stocks that are selling for or at below the value of their Current Assets alone after subtracting Total Liabilities. Then the idea is to divide the result by the number of shares outstanding. If the result is equal to or less than the current market value then the stock is considered cheap. I have experimented with the theory above and have had great success.

I have also lost a lot of money using the strict theory alone. Thus I believe I have improved on the theory by adding some real world additions to it.

On the Total Current Assets part of the Formula I use the following modifications.

Cash ===> I use 100% of the amount listed on the balance sheet

Accounts Receivable ==> I multiply the amount by 75%

Inventory ===> I multiply that amount by 50%

All others I consider at $0

The Addition I added to Grahams Formula is including Property and Equipment into the equation for in the real world , a liquidation of Property and Equipment would be considered .

Thus ;

Property and Equipment ===> I multiply that amount by 50%

I thus multiply each by a certain percentage as to make real what those assets would be worth to a buyer in a total liquidation. Cases may vary depending on the product but using the percentages above I have averaged all types of businesses and found as to what I believe to be the mean or average that works.

Thus the new Formula reads;

[ Cash (100%) + AR(75%) + INV(50%) + P&E(50%)] – Total Liabilities
_____________________________________________________
Diluted Common Shares Outstanding

That is my entire work in a simple formula. It is almost impossible in good times to find stocks selling at total liquidation values, but in miserable or average markets these stocks pop up.

Audiovox (VOXX) is a company that is close to meeting our criteria as listed above and here are the results that show how attractive it is.

Cash ====è $ 20,669,000 value at 100% ===> $ 20,669,000

Short Term Investments ===è $ 8,277,000 value at 100% ====> $ 8,277,000

Net Receivables ===è $ 187,651,000 value at 75% ====> $ 140,738,250

Inventory ===è $ 147,830,000 ====> value at 50% =====> $ 73,915,000

Long Term Investments ===> $ 27,417,000 ====> value at 50% ====> $ 13,708,500

Property Plant and Equipment ===> $ 21,181,000 ===è value at 50% ===> $ 10,590,500

Total Liabilities ===> $ 104,857,000

Shares Outstanding ===> 22,850,000

So add $20,669,000 + $8,277,000 + $140,738,250 + $73,915,000 + $13,708,500 + $ 10,590,500

And you get $ 267,898,250

Now if you minus $ 104,857,000 from $267,898,250 you get $ 163,041,250

$ 163,041,250 / 22,850,250 = $ 7.13

So we have discovered that Audiovox’s Net Net working value = $7.13 which means in a total liquidation the stock would liquidate at $7.13.

So having that buffer as a worst case scenario we see Audiovox worth a lot more especially when you factor in the latest deal that they signed with Energizer holdings.

http://biz.yahoo.com/prnews/080319/nyw010.html?.v=101

I think this is the unique type of investment that Benjamin Graham would have purchased were he alive today.

VALUCAD (< 20) Submitted: 10/12/2007 12:21:28 PM : Start Price: $12.49 VOXX Score: -23.74

Latest quarter revenue +52%; posted earnings profit vs. loss for same period last yeat.

tcampbellla (< 20) Submitted: 9/20/2007 4:04:39 AM : Start Price: $10.94 VOXX Score: +13.94

Not too impressive.

hhkvalue (45.09) Submitted: 7/22/2007 10:31:11 AM : Start Price: $11.54 VOXX Score: -18.49

Trades substantially below Book Value, with proven business and reasonable cash flow generation and virtually no l/t debt. It will rebound, just a question of when.

na100 (76.32) Submitted: 7/13/2007 3:16:46 AM : Start Price: $12.78 VOXX Score: -27.37

The liquidation value of Audiovox is about $14 per share, and it is not losing money.