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Eksons is a Bursa ex-plywood manufacturer cum property developer trading below its Graham Net Net.
The Graham Net Net (current assets minus total liabilities) is often used as a short-hand for liquidation value. The general view is that if you have a company trading very much below its Graham Net Net, you have found an investment opportunity.
Eksons is currently trading at RM 0.52 per share compared to its Graham Net Net of RM 2.02. You may think that this is a bargain.
But Eksons currently does not have any significant operations and is a cash holding company. This makes it a cash-holding value trap.
A value trap is a company that appears cheap but instead of being a bargain turns out to be a dud. Normally if you have a Graham Net Net, it is not a value trap. But this applies only if there are operations.
For a company with lots of cash but without significant operations, you have to assess it differently. This is the case with Eksons
