NCAV Screen


The Net Current Asset Value (NCAV) stock screen was made popular by Benjamin Graham and proved to be a successful approach for the Graham-Newman Corp. Warren Buffett also enjoyed terrific returnsby implementing this approach in the early days of his career.

Buffett called this strategy the “cigar-butt” approach because “a cigar butt found on the street that has only one puff left in it may not offer much of a smoke, but the ‘bargain purchase’ will make that puff all profit.”


As this was one of Benjamin Graham’s most widely used and profitable approaches, he mentions it in several of his writings and speeches. NCAV investing is discussed at length multiple times in both Security Analysis and The Intelligent Investor.

This screen finds deep value stocks and doesn’t account for a firm’s property, plant, and equipment (PPE) or its future earnings.

Core Criteria

The NCAV screen is really straight forward in that it calculates a stock’s value based on the company’s current assets, total liabilities, and total shares outstanding.

To qualify as a possible investment with the NCAV screen, a stock must meet the two criteria below:

  • Current Assets > Total Liabilities
  • Operating Revenue > 0
  • Market Cap > 1 million

Valuation Factors

To calculate the NCAV of a stock, we use the following formula:

  • (Current Assets – Total Liabilities) / Number of Shares

So, a company with $1 billion in current assets, $500 million in total liabilities, and 50 million diluted shares would have a NCAV of $10/share.

  • 1,000,000,000 – 500,000,000 = $500,000,000
  • 500,000,000 / 50,000,000 = $10 per share

NCAV Results

Premium Membership: The 200 stocks meeting all the core criteria with the lowest price to NCAV are displayed in spreadsheet format. Premium screens can be sorted by fundamentals.


Graham acknowledged that this approach is “ridiculously simple” but argued for its undeniable success. He made it clear that the results of investing in NCAV stocks were “quite satisfactory” in his experience for over 30 years.

Late in his life, he estimated this strategy earned him an average of 20% year. He said, “I consider it a fool-proof method of systematic investment – not on the basis of individual results but in terms of the expectable group outcome.”

Graham warned that the approach only works “if you can find enough of them to make a diversified group, and you don’t lose patience if they fail to advance soon after you buy them.” For a deep margin of safety, Graham always made an effort to pay no more than two-thirds the NCAV.

This can be put into practice by regularly investing equal amounts in the qualifying stocks with the lowest prices in relation to net current asset value.

Follow along with our corresponding Shadow Stock Portfolio as it systematically invests based on the results of this stock screen.

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Mitchell Mauer

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