Introduction
Low PEG Ratio stocks can offer good values with reasonable growth prospects. This was one of the favorite metrics used by Peter Lynch of the Fidelity Magellan fund. When applied to the large cap stocks, this is likely to return us names that may be temporarily mis-valued. Although chances of finding great undervalued stocks this way are not very good, the stocks that we do find have other qualities that may make them appropriate for consideration
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Screen Details
This screen looks for small cap stocks above $30 million and less than $2 billion in market capitalization with good valuation based on Book Value and Earnings multiples and a low PEG ratio. A PEG ratio under 1 is considered low. Dividends and other attributes are of no consideration in the screening (although you will look at other attributes in your further due diligence):
- PEG ratio, forward < 1
- PEG ratio, trailing < 1
- Price/Book Ratio < 2
- Price/Earnings Ratio < 12
The Screen Results
Stock | Company | PEG Forward | P/B Ratio | P/E Ratio |
---|---|---|---|---|
TURN | 180 Degree Capital | 0.2 | 0.6 | 4.9 |
APT | Alpha Pro Tech | 0.6 | 0.9 | 8.9 |
ALTO | Alto Ingredients | 0.7 | 1.5 | 11.4 |
CRMT | America's Car Mart | 0.4 | 1.3 | 5.5 |
BBAR | Banco BBCA Argentina | 0.1 | 0.5 | 3.8 |
BMA | Banco Macro | 0.1 | 0.5 | 4.5 |
BCBP | BCB Bancorp | 0.9 | 1.2 | 10.7 |
BZH | Beazer Homes USA | 0.8 | 0.7 | 3.5 |
TCPC | Blackrock TCP Capital | 0.9 | 1.0 | 6.1 |
BWB | Bridgewater Bancshares | 0.7 | 1.6 | 11.1 |
CPLP |
Capital Product Partners |
0.3 |
0.7 |
3.5 |
CCS |
Century Communities |
0.4 |
1.1 |
4.0 |
COHU |
Cohu |
0.2 |
1.7 |
9.0 |
TCFC |
Community Financial |
1.0 |
1.1 |
9.0 |
CONN |
Conn's |
0.3 |
0.8 |
4.5 |
CPSS |
Consumer Pf Servs |
0.3 |
1.5 |
6.5 |
TCS |
Container Store Group |
0.5 |
1.1 |
4.7 |
COWN |
Cowen |
0.4 |
0.8 |
3.2 |
PMTS |
CPI Card |
0.6 |
- |
10.6 |
CUBI |
Customers Bancorp |
0.7 |
1.5 |
5.6 |
DLA |
Delta Apparel |
0.5 |
1.3 |
9.2 |
LPG |
Dorian LPG |
0.8 |
0.6 |
7.8 |
EBMT |
Eagle Bancorp Montana |
0.9 |
1.0 |
10.3 |
EGLE |
Eagle Bulk Shipping |
0.1 |
1.3 |
5.6 |
ECPG |
Encore Capital Grp |
0.6 |
1.3 |
5.6 |
ESCA |
Escalade |
0.5 |
1.3 |
8.0 |
ETD |
Ethan Allen Interiors |
0.9 |
1.9 |
8.7 |
FMNB |
Farmers National Banc |
0.5 |
1.3 |
9.9 |
HVT |
Haverty Furniture Cos |
0.5 |
1.9 |
5.9 |
IMKTA |
Ingles Markets |
0.5 |
1.7 |
6.9 |
JOUT |
Johnson Outdoors |
0.6 |
1.8 |
11.2 |
KREF |
KKR Real Estate Finance |
0.7 |
1.0 |
9.5 |
KOP |
Koppers Hldgs |
0.4 |
1.5 |
7.2 |
LAKE |
Lakeland Industries |
0.6 |
1.2 |
8.9 |
LX |
LexinFintech Holdings |
0.7 |
0.4 |
1.6 |
LFVN |
Lifevantage |
0.6 |
1.8 |
6.7 |
MHO |
M/I Homes |
0.2 |
0.8 |
3.6 |
HZO |
MarineMax |
0.2 |
1.6 |
6.1 |
MFIN |
Medallion Financial |
0.4 |
0.8 |
4.2 |
MOD |
Modine Manufacturing |
0.8 |
1.1 |
8.1 |
MOV |
Movado Group |
0.7 |
1.9 |
10.4 |
NMIH |
NMI Holdings |
0.3 |
1.2 |
8.2 |
NOA |
North American |
0.8 |
1.9 |
11.5 |
OIIM |
O2Micro Intl |
0.8 |
1.2 |
10.8 |
OCSL |
Oaktree Specialty Lending |
0.9 |
1.0 |
6.1 |
ZEUS |
Olympic Steel |
0.2 |
1.0 |
3.5 |
OPBK |
OP Bancorp |
0.7 |
1.3 |
7.5 |
OPY |
Oppenheimer Hldgs |
0.3 |
0.7 |
3.8 |
PKBK |
Parke Bancorp |
0.3 |
1.2 |
7.1 |
PNNT |
Pennant Park Investment |
0.3 |
0.8 |
4.3 |
PRDO |
Perdoceo Education |
0.5 |
1.3 |
7.6 |
PRAA |
PRA Group |
0.4 |
1.4 |
11.3 |
QCRH |
QCR Holdings |
0.9 |
1.3 |
9.3 |
RLGT |
Radiant Logistics |
0.3 |
1.9 |
11.2 |
RLGY |
Realogy Holdings |
0.2 |
0.9 |
5.8 |
RWT |
Redwood Trust |
0.3 |
0.9 |
4.5 |
RM |
Regional Mgmt |
0.3 |
1.7 |
5.8 |
RVSB |
Riverview Bancorp |
0.7 |
1.0 |
8.0 |
SB |
Safe Bulkers |
0.3 |
0.8 |
3.2 |
SCHN |
Schnitzer Steel Indus |
0.8 |
1.7 |
7.9 |
SCVL |
Shoe Carnival |
0.8 |
2.0 |
5.9 |
SAH |
Sonic Automotive |
0.3 |
1.8 |
5.9 |
SNEX |
StoneX Group |
0.6 |
1.6 |
11.3 |
SMMF |
Summit Finl Gr |
1.0 |
1.1 |
7.5 |
TGH |
Textainer Group Holdings |
0.6 |
1.7 |
4.7 |
TLYS |
Tilly's |
0.9 |
1.7 |
4.7 |
TSBK |
Timberland Bancorp |
0.7 |
1.1 |
9.1 |
TITN |
Titan Machinery |
0.4 |
1.5 |
10.2 |
USAK |
USA Truck |
0.2 |
1.8 |
8.0 |
VHI |
Valhi |
0.3 |
1.0 |
6.5 |
WGO |
Winnebago Industries |
0.3 |
1.5 |
5.6 |
ZEPP |
Zepp Health |
0.6 |
0.4 |
9.3 |
ZUMZ |
Zumiez |
0.9 |
1.8 |
8.6 |
Notes and Observations
We have had a good amount of correction in valuation for most stocks in the recent months and as a result there are many stocks that look cheap. These stocks run the gamut from financial to technology sectors and everything in between. There are some names that are immediately interesting to me and I will be conducting further research on these and post as appropriate. At this time, my focus is on businesses with tangible assets that can retain value and continue growth in a high inflation period.
Thanks for sharing this comprehensive list. Out all of the picks Tilly’s been on my radar for a while.