Mark Perkins sends: Clothing store Stein Mart (SMRT), which operates in 30 states, fell as low as $1.65 in the big sell-off Friday morning. SMRT soared 60% Friday. It rallied with the market all the way to $2.80. SMRT has net current assets of $113 million and last traded for just $99 mil. Their earnings over the next couple years really scare me as we are entering a deep recession, but you can see the cheap valuations that are starting to pop up in good companies. I expect and am anxious to see valuations along this line in great mid- to large-capitalization companies over the next year.

Spartan Motors (SPAR) was once a high flying auto chassis and bodies parts company and briefly touched below its net current asset value of $88 mil.

Superior Uniform Group (SGC) a uniform maker for hospitals, industrials, airlines and public and private safety and security companies has $54 mil in NCAV and trades for $53 million. They have generated quite a bit of free cash flow in the past and management has reduced shares since 1998. They have also paid a dividend for many years. SGC looks like it could be a good potential buy.

USEC (USU) is a volatile day-ranger the past week. It supplies low enriched uranium (LEU) for commercial nuclear power plants worldwide. $460 mil in NCAV and a market cap of $445. They’ve grown earnings a whopping 39% the past 5 years. When they aren’t investing a lot they can really spit off the free cash flow. They had $234 million in FCF in 2006! This looks like an interesting play on the need for more power plants. The world needs energy alternatives. There has been a lot of buying by executives this year. Earnings next year are expected to grow over 100% to $.70. Currently at $4 it is trading for 11x this years earnings.

When we get deeper into the recession a large diversified basket of stocks trading less than 70% of their NCAV’s will no doubt outperform the indices. After the tech bubble burst in 2000 many technology
stocks could be had for around working capital and cash in the recession years. Eventually, I imagine there will be easy long-term values in banks and other beaten-down sectors to be had.