As a continuation of my post last year on Japanese Net-Nets, I decided to cast a wider net. I included other countries in Asia, as well as, North America, and Europe. It was such an interesting exercise for me last year that I couldn’t help but expand it. Building the database, of course, is the real challenge. To do that, I’m using LSEG Data.

The period of study is April 20, 2010 to April 20, 2025, providing 15 years of data.

To screen for stocks, I use the traditional equation: NCAV (per share) = (Current Assets – (Total Liabilities + Preferred Stock) ) ÷ (Closing Stock Price * Shares Outstanding).

I excluded stocks trading below a market capitalization of $5 million (USD) at the time of purchase.

Last year, the database was built for Japanese Net-Nets with a primary focus towards those trading at 67% or less of NCAV. This database is aimed at 100% or less of NCAV, and includes: Australia, Canada, Switzerland, Germany, Spain, France, Great Britain, Hong Kong, Italy, Japan, South Korea, Mexico, Poland, Singapore, Taiwan, and the United States. The results greatly increased the size of the database, taking it from 760 stocks last year to 8,738.

And again here by year and region.

Stocks that did offer the proper data fields from LSEG were obviously excluded, so I’m sure there were many Net-Nets that didn’t make the cut. Of particular importance are the names that made the cut but had insufficient data to make the necessary calculations. For example, LSEG was unable to provide an ending stock price for 101 names over the length of the study. Were these companies acquired? Went private? Bankrupt? Or did LSEG just miss the data? I’ll leave it to you to decide how to account for this discrepancy. For example, Till Capital Corp shows no end price but a quick search reveals that it probably is an error on LSEG.

Below is the count by country of stocks that did not have an end price and were excluded from the study. (Acknowledge survival bias, but out of ~8,700 names, it seems minor).

TR.ExchangeCountryCode
AU     3
CA    61
ES     2
KR     1
PL     1
US    33
Name: Instrument, dtype: int64

The portfolios are equal-weighted and the number of positions varied each year.

On April 20th of each year (or thereabouts depending on it being a trading day), the portfolios were rebalanced as of the end-of-day closing price. I did not make any adjustments for transaction fees or slippage and assumed all orders were filled.

Although these sectors are typically left out, Financial and Real Estate are included.

The returns are priced and calculated in the standardized currency and do not account for relative currency fluctuations. Dividend payments were included in the returns of the Net-Net portfolios.

The chart below shows returns by country and region based on two buckets: (1) stocks trading at or below Net Current Asset Value, and (2) stocks trading at or below 2/3 of Net Current Asset Value.

Taiwan and Japan performed well, while Hong Kong and Singapore did not — which surprised me. South Korea was so-so. Also, Europe performed very well. The sample size in Europe is too small. It’s best to look at the entire continent rather than individual countries. (Many countries in Europe had inadequate representation year to year). North America was abysmal. I think this is the main reason folks around here say Net-Nets don’t work anymore. The quality of American Net-Nets, as a whole, is not very good. Based on this simple study, focus may be most rewarded in Taiwan, Japan, and Europe.