Priced below its own cash
The market is valuing the business below zero.
Enterprise value is market cap plus debt minus cash. Below zero, the cash net of debt exceeds what the shares cost — you are paid to take the operating company. The price/sales and liquidity rules are there to make sure there is a business attached and that the cash is genuinely available.
Educational research tooling, not investment advice. A screen is a filter over public data, not a recommendation.
What the Negative EV screen tests
The market is valuing the operating business below zero — cash net of debt exceeds the whole market cap. The liquidity rules exist because that cash has to actually be there.
The rules, one by one
Every rule below is applied on every scan and reported with the value it was tested against, pass or fail. Each threshold is yours to change.
- Enterprise Value
- Market cap plus debt minus cash. Below zero means you are handed more net cash than the shares cost.
- Price / Sales
- Market cap over trailing revenue. Keeps negative-EV names from being cash shells with no business attached.
- Current Ratio
- Current assets over current liabilities. The asset discount is only real if the company can pay next year's bills without a forced sale.
- Dilution
- Change in share count year over year. Positive means new shares are transferring your claim to someone else; negative means buybacks. Based on annual filings, so it lags.
Who this screen is for
- Investors hunting special situations where the balance sheet, not the income statement, carries the thesis.
- Anyone comfortable underwriting cash burn — the question is always how long the cash lasts.
- Investors who need a dividend or a near-term catalyst.
- Anyone unwilling to check whether the cash is encumbered, offshore, or already committed.
Negative EV FAQ
Doesn't negative enterprise value mean free money?
Only if the company stops burning it. Negative EV names are frequently loss-making, and the cash pile shrinks every quarter. The screen requires liquidity but cannot tell you the burn rate — that is the second pass.
Why the price/sales limit?
It keeps cash shells with no revenue out of the list. A negative-EV company with essentially no sales is a pile of money with a listing, not a business at a discount.
Why does every screen test dilution?
A discount that closes while the share count grows is a discount someone else collected. Dilution is measured from annual filings as the year-over-year change in shares outstanding, so it lags — a company that issued stock last quarter can still pass.
Other screens
NCAV
Net current asset value is current assets minus every liability. When it exceeds the market cap, the market is handing you the working capital and charging nothing for the business attached to it. The liquidity and leverage rules exist so that discount survives long enough to close.
Acquirer's Multiple
EV/EBITDA is what an acquirer of the entire business pays for its operating earnings. It is used instead of P/E because it is indifferent to how the company is financed — debt and cash are already in the numerator. The screen adds conservative leverage and a share count that is not growing.
Simple Way
Profitable, cheap on earnings and on book, funded mostly by equity rather than creditors, and yielding above the market. The dividend is the point: a slow re-rating is far easier to sit through when the position pays you for the wait.
Five scans, no card.
Run Negative EV over the universe you choose, open any company, and read the rules it passed and the ones it did not.
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