I have to say that the screen today is an absolute gold mine for classic value investors!
43 stocks in a variety of sectors and industries that are trading way below their book values. To add to this, each of these companies have very little debt (as seen with the low debt/equity ratio). So as far as the balance sheet goes, you are able to buy up these assets on the cheap.
This list also contains a number of the rare net-net stocks. These stocks basically give you the operating business for free – the balance sheet is so mis-valued that you can buy the entire company in the market, use the current assets to pay off ALL debt, and you will have enough left over to return 100% or more of your investment back to you. Long term assets are free and so is the operating part of the business.
This being said, be wary of the fact that some of these stocks trade on OTC with very little liquidity. For value investors, this shouldn’t matter much, but you need to know that you won’t be able to exit the position in a hurry, should you need to do so.
The Low Price to Book Value Screen Criteria
We have stayed within the confines of the small cap value asset class. However, expanding the market capitalization filter to the larger stocks would not have mattered much. A disproportionate number of cheap value stocks are found in the small cap value class.
I screened for North American companies with market value under $3 Billion and over $30 million. We capped the price to book ratio at 0.75. This gave me a large number of stocks, most of which were junk as those companies carried huge amounts of debt relative to their market values (debt bombs – the price of the stock is distressed for a reason). To remove these unqualified stocks, I required a Total Debt/Equity ratio of under 20% and in most cases got it.
Since we have a large number of ideas, I have grouped them by the Sector. This gives us a good way of organizing further research. You may choose to pick the sectors/industries you want exposure to, and then look for the most attractive stocks in that group.
Consumer Discretionary
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| VOXX | VOXX International Corp | $ 5.45 | $134.30M | 0.29 | 9.64 % | Auto Components |
| DDE | Dover Downs Gaming & Entertainment Inc. | $ 1.59 | $53.59M | 0.47 | 18.24 % | Hotels, Restaurants & Leisure |
| YOGA | YogaWorks Inc | $ 1.86 | $30.52M | 0.60 | 4.75 % | Hotels, Restaurants & Leisure |
| CSS | CSS Industries Inc. | $ 17.34 | $160.51M | 0.63 | 8.09 % | Household Durables |
| MSN | Emerson Radio Corp | $ 1.45 | $33.94M | 0.74 | – | Household Durables |
| PFIN | P & F Industries Inc | $ 8.58 | $30.78M | 0.67 | 6.65 % | Household Durables |
| NVFY | Nova Lifestyle Inc | $ 1.70 | $48.21M | 0.70 | 6.26 % | Household Durables |
| TUES | Tuesday Morning Corp. | $ 2.90 | $135.48M | 0.71 | 15.60 % | Multiline Retail |
| CBK | Christopher & Banks Corp. | $ 0.92 | $34.43M | 0.68 | – | Specialty Retail |
| WCRS | Western Capital Resources Inc | $ 3.80 | $35.69M | 0.54 | 9.20 % | Specialty Retail |
Brief Notes on these Consumer Discretionary Stocks
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Energy
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| CRR | CARBO Ceramics Inc. | $ 9.07 | $251.93M | 0.66 | 19.03 | Energy Equipment & Services |
| GIFI | Gulf Island Fabrication Inc | $ 9.30 | $144.41M | 0.67 | 1.08 | Energy Equipment & Services |
| AAV | Advantage Oil & Gas Ltd | $ 3.15 | $595.08M | 0.58 | 14.18 | Oil, Gas & Consumable Fuels |
| OBE | Obsidian Energy Ltd | $ 1.13 | $559.82M | 0.32 | 16.78 | Oil, Gas & Consumable Fuels |
| GXOCF | Granite Oil Corp | $ 2.21 | $74.88M | 0.49 | 18.25 | Oil, Gas & Consumable Fuels |
| ROYE | Royal Energy Resources Inc | $ 2.02 | $35.68M | 0.29 | 18.97 | Oil, Gas & Consumable Fuels |
| RMP | Rice Midstream Partners LP | $ 16.97 | $1.75B | 0.69 | 13.83 | Oil, Gas & Consumable Fuels |
Brief Notes on these Energy Stocks
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Financials
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| SWKH | SWK Holdings Corp | $ 10.15 | $132.49M | 0.64 | – | Diversified Financial Services |
| NWLI | National Western Life Group Inc | $ 308.00 | $1.12B | 0.61 | – | Insurance |
| UNAM | Unico American Corp | $ 7.82 | $41.48M | 0.69 | – | Insurance |
Brief Notes on these Financials Stocks
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Health Care
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| AQXP | Aquinox Pharmaceuticals Inc | $ 2.26 | $54.92M | 0.56 | 0.04 | Biotechnology |
| GTBP | GT Biopharma Inc | $ 1.82 | $93.22M | 0.37 | 5.19 | Biotechnology |
| CLDX | Celldex Therapeutics Inc | $ 0.49 | $70.98M | 0.53 | – | Biotechnology |
| OVAS | OvaScience Inc | $ 0.93 | $33.38M | 0.58 | – | Biotechnology |
| AGTC | Applied Genetic Technologies Corp | $ 3.90 | $70.65M | 0.67 | – | Biotechnology |
| CHMA | Chiasma Inc | $ 1.55 | $38.40M | 0.61 | – | Pharmaceuticals |
Brief Notes on these Health Care Stocks
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Industrials
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| AFI | Armstrong Flooring Inc | $ 14.18 | $367.08M | 0.68 | 16.02 | Building Products |
| AXR | AMREP Corp. | $ 7.16 | $57.99M | 0.69 | 0.19 | Commercial Services & Supplies |
| QRHC | Quest Resource Holding Corp | $ 2.01 | $31.06M | 0.51 | 9.93 | Commercial Services & Supplies |
| KELYA | Kelly Services Inc. | $ 22.16 | $855.93M | 0.72 | 1.50 | Professional Services |
Brief Notes on these Industrials Stocks
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Information Technology
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| QTRH | Quarterhill Inc | $ 1.10 | $128.15M | 0.52 | 5.39 | Communications Equipment |
| CLRO | ClearOne Inc | $ 3.70 | $31.54M | 0.55 | – | Communications Equipment |
| JCS | Communications Systems Inc. | $ 3.94 | $33.47M | 0.68 | – | Communications Equipment |
| MRIN | Marin Software Inc | $ 5.85 | $34.09M | 0.54 | 4.18 | Internet Software & Services |
| PLAB | Photronics Inc | $ 7.65 | $545.13M | 0.70 | 8.05 | Semiconductors & Semiconductor Equipment |
Brief Notes on these Information Technology Stocks
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Materials
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| FTK | Flotek Industries Inc | $ 3.15 | $182.28M | 0.68 | 13.96 | Chemicals |
| EGO | Eldorado Gold Corp | $ 0.96 | $760.61M | 0.21 | 16.41 | Metals & Mining |
| ALO | Alio Gold Inc | $ 1.41 | $63.89M | 0.33 | 1.01 | Metals & Mining |
| TGCDF | Teranga Gold Corp | $ 3.50 | $381.19M | 0.60 | 2.26 | Metals & Mining |
| FRD | Friedman Industries Inc | $ 6.38 | $44.58M | 0.73 | 1.55 | Metals & Mining |
| GMO | General Moly Inc | $ 0.41 | $50.64M | 0.47 | 6.68 | Metals & Mining |
| TAHO | Tahoe Resources Inc | $ 4.92 | $1.51B | 0.58 | 1.33 | Metals & Mining |
Brief Notes on these Materials Stocks
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Real Estate
| Symbol | Company Name | Security Price | Market Capitalization | Price/Book Ratio | Total Debt/Equity (TTM) | Industry |
|---|---|---|---|---|---|---|
| IOR | Income Opportunity Realty Investors Inc. | $ 13.35 | $55.56M | 0.63 | – | Real Estate Management & Development |
Brief Notes on this Real Estate Stock
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This screen has provided some very interesting opportunities. 10 out of the 43 stocks are being added to the watch list for further review. Out of these 10 stocks, 2 are net-net stocks with 3 more are very close to being net-net. I expect this list to yield a good number of new additions to the Value Stock Guide portfolio.
As always, please do your own research before you purchase any of these stocks.
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