The previous 5 years have not exactly provided the ideal environment for business growth. It has been a common sight to see companies mercilessly cutting expenses, using up their rainy day cash or otherwise finding other ways to erode their book value as they struggled to grow. In this light, the companies that did manage to grow their book value at the market leading rates, merit further attention. There may be something in their business model, industry, or just the quality of their management that might translate in an even better performance in an improving economic environment. The following 5 companies also have some of the lowest P/E ratios in their respective industries.
1. GT Advanced Technologies Inc (GTAT): GT Advanced Technologies is a specialized semiconductor company making products for solar and LED markets. The company provides polysilicon production technology and multicrystalline ingot growth systems, and related photovoltaic (PV) manufacturing services for the solar industry worldwide. It also offers sapphire growth systems and material for the LED and other specialty markets. GTAT has grown its Book Value on average 37% in the last 5 years and boasts a ROE of 61.5%. The stock trades at a PE ratio of 6.4
2. C&J Energy Services Inc (CJES): C&J Energy Services, Inc., through its subsidiaries, provides hydraulic fracturing, coiled tubing, and pressure pumping services to oil and natural gas exploration and production companies. It has operations in south Texas, east Texas/north Louisiana, western Oklahoma, and west Texas/east New Mexico. With almost 40% average BV growth in the last 5 years and 61.7% ROE, the company appears to be doing really well. The stock can be bought at a 5.7 PE ratio.
3. KapStone Paper & Packaging Co (KS): KapStone Paper and Packaging Corporation engages in the production and sale of unbleached kraft paper products primarily in the Americas, Europe, and Asia. The company offers containerboard to converters in the corrugated packaging industry, and to other converters for various end uses. The company has been growing its BV at an average of 20.4% in the last 5 years and the stock trades at 7.9 PE and a PEG ratio of 0.26.
4. CAI International (CAP): Container shipping has gathered lot of attention recently. CAI International, Inc. operates in the intermodal marine cargo container leasing business in the United States and internationally. The company leases, re-leases, and disposes containers; and contracts for the repair, repositioning, and storage of containers. At a 35% average BV growth rate, 23.7% ROE and a PE ratio of just 7.3, the stock is definitely worth further look.
5. Majesco Entertainment Company (COOL): Majesco Entertainment Company develops and markets video game products primarily for family oriented, mass-market consumers primarily in the United States, Europe, and the PAL territories. The company publishes video games for various interactive entertainment hardware platforms, including Nintendo’s DS, DSi, and Wii; Sony’s PlayStation 3 and PlayStation Portable; Microsoft’s Xbox 360; and personal computers. It also publishes games for various digital platforms consisting of mobile platforms, such as iPhone, iPad, and iPod Touch, as well as online platforms, including Facebook. Its 50% average BV growth banks on the popularity of its titles such as Zumba Fitness and others. The company has an impressive 30% ROE and a PE ratio of just 13.37.
This is a very diverse list of companies in different sectors and is sure to provide new stock ideas for investors looking for growth at a reasonable price. These can be great stocks to buy for medium to long term and merit a deeper review.