By using the ModernGraham Valuation Model, I’ve selected the companies in the MG Universe which trade the closest to their Net Current Asset Value (NCAV). NCAV is a useful figure for determining whether a company is trading at a significant bargain.

NCAV is calculated by taking the total current assets less the total liabilities. In other words, the figure is what would be left if investors purchased the company and used cash to pay off all of the liabilities. The remainder would then be available to be distributed to the investors. As a result, companies should rarely, if ever, trade below NCAV. Companies that trade close to the figure may also have some opportunities for profit.

Each company I’ve selected has been determined to be suitable for the Defensive Investor and/or the Enterprising Investor and undervalued according to the ModernGraham approach.  Defensive Investors are defined as investors who are not able or willing to do substantial research into individual investments, and therefore need to select only the companies that present the least amount of risk. Enterprising Investors, on the other hand, are able to do substantial research and can select companies that present a moderate (though still low) amount of risk.

Seneca Foods Corp

Seneca Foods Corp  (SENEA) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, poor dividend history. The Enterprising Investor is only concerned with the lack of dividends. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.73 in 2012 to an estimated $2.72 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.19% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.