A couple of weeks ago, we took a look at how stocks could be much cheaper - or much more expensive - then they look based on their enterprise value.

In it, we went through a generic example of how two companies with the same earnings and market cap can have wildly different relative value based on the amount of cash and debt on their balance sheets.

Naturally, the question arose: "so which stocks are way cheaper - or more expensive - than they look, today?".

Let's start today with the former question, as it is far more rare for stocks to be substantially cheaper than they look vs. the alternative.

Parameters Of The Experiment

Let's start out by defining what "way cheaper then they look" really means.

As discussed in the prior article, cheaper than it looks means that the stock's enterprise value comes in lower than its market capitalization, as the company carries more cash on its balance sheet than debt.

But what does "way cheaper" mean?

It is always good for enterprise value to be lower than market cap, but there are hundreds, perhaps thousands of companies that fit that criteria. I'm looking for situations where you can take the P/E or P/S ratio and split it in half, the company has so much cash. So an enterprise value that is 50% or less of the market cap are what we will list.

Second, all of these companies had to be profitable on a trailing twelve months basis.

Finally, I threw out any firms with market capitalizations under $50 million. While there were actually several sub-$50m stocks that met our 50% criteria, most investors are not interested in firms that small.

Should You Buy?

Without further research, no way!

These companies, quantitatively, are much cheaper than a P/E or P/S ratio would make them seem. That's all we are saying here. While a typical P/E screen might not pull them up, taking into account their net cash would definitely make them more competitive in a value screen.

However, by no means should anyone buy sight unseen. A LOT of these companies are still on the small side, with limited trading volume, few competitive advantages, and in some cases concentrated customer bases. Take a look at the companies, their prospects, their risks, and only then make a decision.

The List

So, here they are... the only 16 stocks I found that have an enterprise value less than half of their market cap (figures are from Yahoo!):