NAV
Net Asset Value · NAV
The value of all a company's or fund's assets minus all liabilities — what would remain if everything were converted to cash and all debts repaid on a given day.
What it is
NAV = Market/fair value of assets − Total liabilities
Unlike the book value of assets on the balance sheet (cost minus depreciation), NAV attempts to value assets at their current fair value — for real estate funds (REITs) the market value of properties, for investment funds the market value of the held portfolio, for a holding company the sum of the fair values of its stakes.
NAV is the typical valuation approach for entities whose value is primarily driven by what they own, not by how much operating profit they generate — funds, real estate companies, holdings with significant financial assets.
NAV per share = NAV / number of shares — compared against the market share price in the same way as other intrinsic value metrics.
Why track it
The gap between the market price and NAV per share shows whether the market is trading at a premium (price above NAV — the market expects management to create further value) or a discount (price below NAV — the market does not believe in the full realization of value, or the structure is inefficient).
For holdings and conglomerates, NAV per segment is an input into SOTP valuation — segments that are primarily about asset ownership (real estate, investment portfolio) are typically valued via NAV rather than an earnings multiple.
Real-world example
A real estate fund owns a property portfolio at fair value of $2bn, with debt of $800m → NAV = $1.2bn. With 100m shares outstanding, NAV per share is $12. If the stock trades at $10, that is a ~17% discount to NAV.
Watch out for
The "fair value" of assets in NAV often rests on appraisals, not actual market transactions — for illiquid assets (real estate, private equity stakes) it can be stale or overly optimistic. A persistent large discount to NAV without a catalyst (sale, spin-off) may never close — the market may be "right" to price it lower if it does not trust management.