Dubious discounts

Enterprise value (EV) refers to the total market value of a company for its capital providers (both equity- and debt-holders). To calculate EV, the market capitalisation of equity shares, market value of debt and minority interest are added, and then cash and cash equivalents are subtracted from the sum. To put it in simple terms, EV is what you need to pay to completely own a company: you pay out the entire market cap and the debt; you pay the minority shareholders for their stakes. And you get the cash the company has. We have shortlisted 11 companies whose EV is at a significant discount to their market capitalisation. Such companies are attractive because EV being at a discount to market cap means presence of significant cash on the balance sheet. However, before you get too excited about the cash, beware. Such companies could also very well be value traps. You must research such companies thoroughly before you take the buy call. Try to figure out especially why the company is sitting on a cash pile. Here is what is happening in the 11 shortlisted companies: Kothari Products The company has trade pa