I tweaked one of my favorite screens looking for a good company, not necessarily a Net-Net. The screen had the following criteria.

Last EPS Surprise (%) > 5
P/E (Trailing 12 Months) < 1.3
Current ROE (TTM) > 20
Current ROI (TTM) > 20
Price/Book < .8

Just one company came up. Soapstone Networks (SOAP) with a mind boggling trailing twelve month ROE of 60% and ROI of 60%, 38% positive EPS surprise, PE of 1, price/book .53.

Soapstone Networks generates gobs of free cash flow, $56 million in 2007 up 270% from $15 million in 2006. It is good to see a company deliver robust free cash flow, especially since earnings are more easily manipulated. There are currently 14,820,752 shares outstanding. With $96,417,000 in cash on the balance sheet at the end of March 31st there is $6.50 per share in cash, $7.05 including liquid marketable securities and net current assets per share of $6.80. This stock last traded for $4.56! Cash on the balance sheet has been increasing every quarter since June 2007 when they only had $32 million in cash on their books.

This is definitely a deep value stock like Heelys (HLYS) and major contrarian play if one was to pick some up here. Soapstone believes they will burn through some cash over coming quarters but future cash flows should come in. It may be a good opportunity if they can deliver on their new products. The balance sheet is stellar.