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Small Caps With Little Attention
It stands to reason that if a stock is not getting any attention, a chance exists for an inefficient security. Most company stocks live and die by analysts' estimates and reports. Considering that many analysts' estimates turn out to be of little value to the long-term value of a stock, too much analyst following may actually harm a stock. On the opposite side are the neglected small cap names that have little or no analyst attention. As such, you have the possibility of extremely inefficient pricing.
IN PICTURES: 9 Simple Investing Ratios You Need To Know
Out With the Bath Water
Not many follow TravelCenters of America (NYSE:TA), an owner and operator of large truck fueling stations on major interstate highways. TravelCenters was spun out of Hospitality Properties Trust (NYSE:HPT) a few years ago. Since then, it has been a tough time for TA. Fuel margins have been thin and then the economy crashed which reduced truck miles driven. The combination of both led to quarters of unprofitability for TA.
It appears that the situation may be improving: in its most recent quarterly report, TA reported a profit. At just under $4 a share, TA sports a market cap of $62 million. Cash on the balance sheet totals $170 million, while tangible equity sits at just above $250 million, or over $16 a share. (For more, see 5 Strong Small-Cap Stocks.)
Hidden Yield
Ark Restaurants Corp (NYSE:ARK) is a $50 million company that owns and operates 20 restaurants in major cities like New York and Las Vegas. The company has no net debt and close to $9 million in cash. Even better the company pays a dividend of nearly 7% a year. With a healthy balance sheet and positive cash flow, the dividend is good shape. Last year's dividend payout of $2 million was easily covered by operating cash flow. On top of that, nearly 50% of shares are held by insiders. (For more, see Reading The Balance Sheet.)
Maiden Holdings (Nasdaq:MHLD), through its subsidiaries, provides non-catastrophe inland marine and property coverage reinsurance solutions to the regional and specialty insurers in the United States and Europe. The company trades at a 25% discount to book value and yields nearly 4%. Earlier this month, the company increased its dividend payout, so the company feels comfortable about the company's financial position. Shares trade for $7.50, under 7 times forward earnings.
Loving the Unpopular
In life, being unpopular is usually an unfortunate circumstance. In investing, the unpopular or unknown stock could be the darling investment. (For more, see How To Play The Small-Cap Comeback.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 9 Simple Investing Ratios You Need To Know
Out With the Bath Water
Not many follow TravelCenters of America (NYSE:TA), an owner and operator of large truck fueling stations on major interstate highways. TravelCenters was spun out of Hospitality Properties Trust (NYSE:HPT) a few years ago. Since then, it has been a tough time for TA. Fuel margins have been thin and then the economy crashed which reduced truck miles driven. The combination of both led to quarters of unprofitability for TA.
It appears that the situation may be improving: in its most recent quarterly report, TA reported a profit. At just under $4 a share, TA sports a market cap of $62 million. Cash on the balance sheet totals $170 million, while tangible equity sits at just above $250 million, or over $16 a share. (For more, see 5 Strong Small-Cap Stocks.)
Ark Restaurants Corp (NYSE:ARK) is a $50 million company that owns and operates 20 restaurants in major cities like New York and Las Vegas. The company has no net debt and close to $9 million in cash. Even better the company pays a dividend of nearly 7% a year. With a healthy balance sheet and positive cash flow, the dividend is good shape. Last year's dividend payout of $2 million was easily covered by operating cash flow. On top of that, nearly 50% of shares are held by insiders. (For more, see Reading The Balance Sheet.)
Maiden Holdings (Nasdaq:MHLD), through its subsidiaries, provides non-catastrophe inland marine and property coverage reinsurance solutions to the regional and specialty insurers in the United States and Europe. The company trades at a 25% discount to book value and yields nearly 4%. Earlier this month, the company increased its dividend payout, so the company feels comfortable about the company's financial position. Shares trade for $7.50, under 7 times forward earnings.
Loving the Unpopular
In life, being unpopular is usually an unfortunate circumstance. In investing, the unpopular or unknown stock could be the darling investment. (For more, see How To Play The Small-Cap Comeback.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Sham Gad
Sham Gad is the Managing Partner of Gad Partners Fund's, value inspired investment partnerships modeled after the Buffett Partnerships of the 1950's. Previously, Gad ran the Gad Investment Group and delivered annualized returns of 22% from 2002 to 2005. Gad is also the author of "The Business of Value Investing" which will be out in the fall of 2009. Gad earned his MBA at the University of Georgia in May of 2007. Gad runs a value investing blog. He can also be reached by visiting the Gad Partners Funds site. When not writing or analyzing businesses, Gad enjoys hanging out with his wife Maggie, reading, golf, and yoga
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