Net Current Asset Value Per Share - NCAVPS

AAA

DEFINITION of 'Net Current Asset Value Per Share - NCAVPS'

A value created by professor Benjamin Graham in the mid-twentieth century to determine if a company was trading at a fair market price. NCAVPS is calculated by taking a company's current assets and subtracting the total liabilities, and then dividing the result by the total number of shares outstanding.



NCAVPS: (Current Assets- Total Liabilities)
# Shares Outstanding


INVESTOPEDIA EXPLAINS 'Net Current Asset Value Per Share - NCAVPS'

According to Graham, investors will benefit greatly if they invest in companies where the stock prices are no more than 67% of their NCAV per share. A study done by the State University of New York to prove the effectiveness of this strategy showed that from the period of 1970 to 1983 an investor could have earned an average return of 29.4%, by purchasing stocks that fulfilled Graham's requirement and holding them for one year.

However, Graham did make it clear that not all stocks chosen in this manner will have excessive returns, and that investors should also diversify their holdings when using this strategy.

RELATED TERMS
  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Asset Value Per Share

    The total value of a fund's investments divided by its number ...
  3. Liability

    A company's legal debts or obligations that arise during the ...
  4. Net Asset Value - NAV

    A mutual fund's price per share or exchange-traded fund's (ETF) ...
  5. Net Asset Value Per Share - NAVPS

    An expression for net asset value that represents a fund's (mutual, ...
  6. Current Assets

    1. A balance sheet account that represents the value of all assets ...
Related Articles
  1. Relative Valuation Of Stocks Can Be ...
    Markets

    Relative Valuation Of Stocks Can Be ...

  2. Warren Buffett: How He Does It
    Active Trading

    Warren Buffett: How He Does It

  3. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  4. Analyzing A Bank's Financial Statements
    Fundamental Analysis

    Analyzing A Bank's Financial Statements

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center