Ann: Half Year Report - ASX Release, page-28

Interesting discussion on NTA.

For what it’s worth, NTA has never proved to be a useful tool for me in picking a share price winner. Even though, as a value investor, it’s one of the first things I look at.

More often than not, when a stock is on a big discount to NTA, it turns out that the asset value is phony. Often it’s inventory, but it can be other things too, eg land held for development, wasted capex or capitalised labour or R&D.

And when the asset value is justified, or even rising, the percentage discount doesn’t seem to change much anyway. AV Jennings, which I hold, is a good example. Capral would be another.

Having said all that, NAV helps me sleep at night - rightly or wrongly !