queen_anne -- Exactly. Unless they're going to start losing money on operations for the long term, it's hard to worry about being forced to sell the shares below net current assets.
For me the worst cases are (a) spending the cash on a dumb acquisition or (b) long-term loss of profitability. But (a) will probably produce a price *increase* from the silly market, and (b) ... well, it can always happen, but I haven't seen signs of it.
I hate to disappoint all of you, but the book value, OR even the cash in the bank, is not realistically the floor for a stock.
Nobody can really say what the floor is for the stock because nobody really knows. The floor is reached when all the sellers who want to sell have sold and there are no more left. The price of a stock is established at the margin.
At the peak of the latest "panic", NTE was selling for just over $3 a share! That was SUBSTANTIALLY less than the cash NTE had in the bank.
DSWL was an even more extreme example. DSWL is also a Chinese contract manufacturer. Same concept as NTE, but it is much smaller and serves slightly different markets. The management of DSWL and NTE are similar in that they are both VERY conservative. DSWL has no debt, over $2/share in cash, machinery, buildings, land, etc and got as low as $1.25/share. DSWL's book value is conservatively about $7/share.
The point is, when a market panic starts, stocks CAN sell for less than the cash that they have in the bank, and SUBSTANTIALLY less than book value.
Sometimes hedge funds, mutual funds, pools, etc. have to meet shareholder cash outs. They have to pay the shareholders OR go bankrupt. That sometimes means selling stocks irrationally. Of course, individuals also act irrationally (especially in a market panic).
I think NTE is a great company, and patient shareholders will be rewarded. But don't get fooled into thinking "this stock can't go any lower".