As I sat Tuesday evening watching the debut of yet another rookie pitcher for the Orioles, I checked email between innings. To my very peasant surprise I found an email from a young man who has become a good friend.

Lieutenant Corban Bates had emailed me shortly after I started writing here on RealMoney. At the time, he was stationed at Aberdeen Proving Grounds in Maryland, and we were able to get together for dinner. Since then, we chat often on the computer when he has a free minute or two. Since he is currently stationed in Texas, we usually chat late in the evening, as the Army apparently keeps its new West Point grads pretty busy. He is an avid student of investing, particularly value investing.

He shares my interest and fondness for stocks that sell below net current asset value. From time to time he works up a spreadsheet of stocks selling near or below net current asset value. I have no idea where he finds the time, but he does an incredible job of assembling all the relevant information. His spreadsheet is better than several that I have found on the Web that are maintained by investment professionals. In spite of the fact that I am a big fan of Navy football, he is kind enough to share the results with me.

Since the Orioles were winning and I feel the need to watch these rare events, I did not get into the worksheet until yesterday morning. I found that just 42 companies actually traded below the value of net current assets right now. That number has dropped rapidly in recent months and is now at levels I would associate with a market top. The majority of them were well under a $100 million market cap. This reaffirms my belief that deep value investors not constrained by portfolio size should be focusing their research in this area.

Still there were a couple of interesting ideas on the spreadsheet. Opnext is in the data and telecommunications equipment business, and the stock is dirt cheap. The company has been losing money in the global economic contraction, and at least one analyst expects that to continue for several quarters.

The company has over $100 million in net cash, so it may be able to navigate its way through the recession. If can do so, the stock has enormous upside from current levels. A potential kicker is the substantial net operating loss on the balance sheet. Opnext has $120 million of federal tax net operating losses and $100 million for state income tax purposes. The federal tax assets alone are more than half of the stock price.

One would expect shares of PC Connection to be cheap in the current market. The company sells computers and equipment to medium-size businesses, consumers and governments. In the second quarter, sales were off by 16% as corporate customers delayed new purchases of technology.

The bright spot in the report was that sales to municipal and educational customers were up 6%. Sales to the federal government leaped 25% on a year-over-year basis. Although the company showed a loss as a result of impairment charges on a software development project, PC Connection is positive on a cash-flow basis for the first six months of the year. The company has no outstanding borrowings on its credit line and almost half the share price in cash.

When businesses start spending on computers, networks and software again, this stock could easily move back up to the levels seen in 2007. That would be a triple, and you have a large margin of safety in the cash and other assets on the balance sheet.

Two old favorites are on the list trading near net asset value as well. Old favorite and longtime holding Adaptec is still a net asset value stock, and Tech Data trades slightly above net asset value. I like both of these and would not hesitate to be a buyer, particularly on a pullback in the market.

There are several names like Electro Scientific and Ingram Micro that have risen sharply and need to pull back below the level of net current assets to be considered for purchase.

Net current asset bargains are thin on the ground right now, but there are still a few around. I usually consider these too cheap not to own and just buy them regardless of my market outlook. Most are small and really affected by the trading of indices and ETFs, so I focus on value and absolute safety when buying these. The returns from these situations take time and usually involve a business turnaround or asset conversion activity, not stock market gyrations.

Again, many thanks to Lieutenant Bates for providing the spreadsheet.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider OPXT, PCCC, ADPT, EDIO to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.