One of the Cheapest Net-Nets I've Ever Seen
European Net-Net at ~30% of Book Value, ~5 P/E, with 75% of Market Cap in Cash, Consistently Profitable For 15 Years, and No Debt (4.2% Div. Yield)
First, a Brief Lesson In Deep Value
You know what? I love net-nets.
A few months ago, I wrote about a couple of these ugly ducklings:
Bowim S.A. (BOW.WA) and Thyssenkrupp (TKA.DE).
![Exploiting Cyclical Companies For Outsized Returns — Part [2/2]](https://substackcdn.com/image/fetch/w_140,h_140,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1b9aa08c-a4ea-48a6-a8ac-8f21132fe771_1280x960.jpeg)
My thesis for both of them was straightforward (as usual) - mediocre businesses, but trading at some extremely cheap prices.
The market had left these steel companies for dead, pretty much pricing them as though they were worthless. After months of going lower and lower, they became net-nets.
And the beauty of net-nets is in their simplicity.
Buy cheap enough, and even a whisper of good news can wake the market up.
Bowim, for one, was valued by The Efficient & Rational Market™ at roughly 50% of NCAV back in late December 2024. There it was, this small dividend-paying Polish steel company with low debt and profitable for most of its existence that, for some reason, no one wanted to buy or even cover on Twitter for that matter.
My average entry price hovered around 4.5 PLN. Being greedy (or prudent?), I set another buy order at 3.5 PLN.
Unfortunately, that second order never filled.
3.6 PLN ended up being the floor, leaving me just 1% shy of that sweet, rock-bottom entry.
Fast forward 3 short months, and suddenly Bowim bounced back to its NCAV of around 7.2 PLN. I sold my shares mid-session right near the top, for around +55% return.
Stonks’ Proprietary Stock Return Calculator™ confirmed that this equated to an effective IRR of roughly ‘nothing short of awesome…’ nonetheless.
Why the sudden rocket launch, you might ask.
Simply put, some good news arrived:
It’s just been announced that Europe is gearing up to spend big on defense, which, unsurprisingly, gave steel stocks a solid boost. Bowim was swept up in the rally, rapidly going up alongside the rest of the sector, even though there were no significant operational improvements yet visible.
And yes, Europe's steel industry is still very much troubled (just ask the Financial Times), but when you're a deep value investor, bad news often smells a lot like opportunity.
Bowim doubled, and Thyssenkrupp surged roughly 250% from their respective lows.
My personal scorecard in this case is a solid 135% average return in just 5 months on TKA.DE, and approx. +55% on BOW.WA, alongside a few savvy subscribers and a couple of friends who decided to invest in them as well.
However, timing such often-contrarian plays is notoriously tricky. Those returns were obviously influenced by favorable timing, so no one should attribute that purely to skill. Nonetheless, these two cases prove that this dusty old saying holds up:
Buy cheap enough, and even a whisper of good news can wake the market up.
Stonks Value, ‘One of the Cheapest Net-Nets I've Ever Seen’, (2025)
Sometimes they reward you within weeks, but other times you sit twiddling your thumbs for years, questioning your sanity…
The idea, of course, is that buying a basket of such stocks will balance out: some stagnate, a couple pop spectacularly, and hopefully, none of them implode (I’m allergic to leverage, so I have never had the pleasure of experiencing any bankruptcy horror stories).
Nonetheless, when you buy something as cheap as in this example, the market doesn’t always take long to catch on. That is exactly why I love net-nets. A simple strategy, but at the same time very rewarding.
So, when you buy cheap enough, good things tend to happen.
And that, my friend, is one of the most time-tested principles for outperformance.
(at least according to a few people who’ve done it pretty well over the last century)
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So Clean It Feels Like a Mistake
Let’s talk about what really matters: fresh, mispriced opportunities.
The kind of ideas that stop you mid-scroll and make you re-check the numbers a few times.
I’ve got two.
Let’s start with the first one:
A French company trading at 2/3 of NCAV, ~5x earnings, almost zero debt, and sitting on a pile of cash that makes up 75% of its market cap. It’s been profitable for over 15 years straight. Pays a 4.2% dividend as well. Oh, and lately, it’s been buying back shares. Quietly.
There’s barely anyone covering it on Twitter, so chances are this is the first and only available writeup now.
The weirdest part is that it’s not a value trap. I genuinely can’t explain how it got this cheap.
I own shares myself, obviously.
Now, the second one:
A net-net that also happens to be a special sit.
(full writeup will be available for paid subscribers next week)
This small German microcap, consistently profitable for 15 years (almost) without fail, is now trading at just 43% of book. It carries low debt, has a clean balance sheet, recently reinstated its dividend (now yielding 3%), and uplisted to the highest-transparency segment of its stock exchange - all without anyone paying much attention.
It shows up on screeners at around 84% of NCAV - except that number is wrong.
If you're relying only on the headline data, there’s almost no way you’d catch it. I found it by pure luck while reading some recent filings out of pure curiosity.
I haven’t seen much written about this on Twitter as well, so you could say it’s one of those actual ‘overlooked hidden gems’ that most of these questionable AI-powered Substack writers claim to discover every 3 days lately, only to use a metric like sales-to-EBITDA to support the thesis later on…
So, what’s this case about?
Basically, there’s a €23 million equity investment buried in the fixed assets that doesn’t count toward NCAV - yet.
But that’s about to change. When the 2024 annual report drops this Thursday, it’ll be fully consolidated onto the balance sheet. That one accounting shift will push the real NCAV much higher and make the current valuation look a whole lot cheaper.
The consolidation will also impact the earnings: EBIT for FY2024 is expected to stand at €4.8m, which looks damn good for a €37M market cap net-net.
Combined with the reinstated dividend and the recent uplisting, its visibility will improve, which should, in effect, encourage the market participants to ‘fix’ the currently inefficient valuation.
So no, this isn’t just another mildly undervalued cyclical. It’s a net-net with hidden value and a very real, very near-term catalyst.
I own shares myself, and in the full article I’ll explain exactly why.
*This article will be covering just the first net-net. The second part will be published next week.
Now, without further ado, allow me to introduce you to
One of the Cheapest Net-Nets I've Ever Seen: