Introduction
Low multiples such as earnings multiples or book multiples generally represent good values. While this may not be always true, it is true enough that they make for a great screen to shortlist stocks for further review. In this screen we go after the traditional trifecta of low price/book, low price/earnings and low price/sales. At the same time, we are look for some history of sales and earnings growth.
This gives us a good shortlist of stocks from which we can further narrow down our focus by quick review of other fundamental data.
Screen Details
This screen looks for small cap stocks between $30 million and $2 Billion in market capitalization with low multiples:
- P/E ratio between 2 and 10
- P/B ratio < 1.5
- P/S ratio < 2
- 5 year EPS growth rate > 2%
- 5 year Sales growth rate > 2%
The stocks are limited to those listed on US exchanges.
The Screen Results
Stock | Company | P/E Ratio | P/B Ratio | P/S ratio | EPS 5 yr growth | Sales 5 yr growth |
|---|---|---|---|---|---|---|
AAME | Atlantic American | 4.9 | 0.7 | 0.5 | 36.0% | 4.2% |
BBAR | Banco BBVA Argentina | 5.8 | 0.5 | 0.6 | 17.0% | 46.4% |
BMA | Banco Macro | 3.6 | 0.6 | 0.7 | 35.1% | 53.1% |
CFBK | CF Bankshares | 3.9 | 1.1 | 1.3 | 35.0% | 53.5% |
CFFI | C&F Financials | 7.1 | 0.9 | 1.3 | 14.2% | 7.4% |
COWN | Cowen | 3.5 | 1.0 | 0.6 | 81.5% | 37.4% |
DGICA | Donegal Group | 8.1 | 0.9 | 0.6 | 16.3% | 4.1% |
DHT | DHT Holdings | 4.9 | 0.9 | 1.8 | 2.2% | 8.5% |
EBIX | Ebix | 9.1 | 1.4 | 1.3 | 4.4% | 18.0% |
EBMT | Eagle Bancorp Montana | 6.9 | 1.0 | 1.6 | 33.6% | 25.5% |
ECPG | Encore Capital Group | 4.4 | 1.1 | 0.9 | 40.8% | 6.8% |
ENVA | Enova International | 2.6 | 1.3 | 1.2 | 72.4% | 8.2% |
FGBI | First Guaranty Bancshares | 8.6 | 1.1 | 1.9 | 6.7% | 11.8% |
FRO | Frontline | 3.9 | 1.0 | 1.3 | 8.7% | 17.6% |
FSFG | First Savings Financial | 3.3 | 1.0 | 0.7 | 48.4% | 51.0% |
FUNC | First United | 8.5 | 1.0 | 1.9 | 9.9% | 7.7% |
GTS | Triple-S Management | 5.1 | 0.6 | 0.2 | 26.8% | 4.8% |
IMKTA | Ingles Markets | 5.6 | 1.4 | 0.3 | 31.7% | 4.8% |
LARK | Landmark Bancorp | 5.9 | 1.0 | 1.9 | 13.6% | 8.1% |
NAII | Natural Alternatives Int | 9.7 | 1.2 | 0.6 | 6.9% | 10.8% |
NBN | Northeast Bank | 3.9 | 1.1 | 1.9 | 55.9% | 22.6% |
NRIM | Northrim BanCorp | 6.6 | 1.2 | 2.0 | 22.2% | 8.1% |
NWLI | National Western Life | 5.8 | 0.4 | 1.1 | 10.7% | 8.1% |
PANL | Pangaea Logistics Solns | 7.0 | 0.9 | 0.4 | 33.4% | 11.8% |
PRAA | PRA Group | 9.3 | 1.3 | 1.6 | 6.7% | 3.7% |
PTVCA | Protective Insurance | 8.3 | 0.9 | 0.6 | 6.0% | 12.6% |
SBFG | SB Financial Group | 6.6 | 0.9 | 1.9 | 18.4% | 13.9% |
SENEA | SenecaFoods | 3.3 | 0.9 | 0.3 | 20.7% | 2.8% |
SGU | Star Group | 5.2 | 1.2 | 0.3 | 50.1% | 3.1% |
SNFCA | Security National Finl | 3.1 | 0.7 | 0.4 | 33.8% | 11.0% |
SPLP | Steel Partners Holdings | 4.4 | 0.8 | 0.9 | 17.1% | 4.4% |
SPTN | SpartanNash | 9.8 | 1.0 | 0.1 | 4.9% | 4.1% |
STFC | State Auto Financial | 6.4 | 0.9 | 0.5 | 33.8 | 4.1% |
UBOH | United Bancshares | 6.0 | 0.9 | 1.6 | 22.5% | 20.3% |
WSBF | Waterstone Financial | 5.0 | 1.2 | 1.5 | 45.3% | 17.3% |
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Notes and Observations
I am not favoring the financial and energy/marine logistics sectors yet although it is very likely that these 2 sectors will do well in the future as the interest rates rise and the trade supply chain remains disrupted. Of the remaining, SENEA, IMKTA and SPTN are already on our watchlist from other screens.
Ending Note
We have 3 stocks from the list to review further. Please keep an eye on your mailbox as I will start publishing my reviews now as I complete them. You could also take these results as a starting point for your own due diligence.