A quick scan of the Nasdaq investment landscape reveals a number of surprises. First, a great number of equities are listed on the so-called "technology exchange" that possess tremendous value metrics, i.e., solid dividends, low price/earnings (P/E) multiples and selling below book value. Equally surprising is the fact that the best of these "value" stocks hail from the financial sector. (To learn more, see Value By The Book.)
A tale out of Ripley's? Nope. Just a sign that the Nasdaq is not what it once was, and that investors who once shunned the exchange, fearing it was strictly home to "high fliers", need to think again.
Here are three fundamentally rock-solid Nasdaq financials to consider for your portfolio.
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Profits Amid A Storm Of Litigation
Kohlberg Capital (Nasdaq: KCAP) is a closed-end fund that operates two separate businesses: 1) a business development company that provides debt and equity financing, primarily to mid-sized private companies; and 2) an investment management business focused on the corporate debt market. KCAP has a market cap in excess of $113 million, trades with a P/E of 4.17 and a price-to-book (P/B) ratio of 0.52. Annual yield on the stock is 13.49%.
KCAP stock is up 20% in the last six months, a far better showing than the Nasdaq index proxy, PowerShares QQQ Trust ETF (Nasdaq: QQQQ), which gained less than 6% over the same period, and the Financial Select Sector SPDR ETF (NYSE: XLF), which rose 3.5%.
Kohlberg is now a defendant in a number of lawsuits alleging the firm violated Generally Accepted Accounting Principles (GAAP) by misstating the fair value of its investment portfolio.
Southern Bank On The Decline?
NASB Financial (Nasdaq: NASB) operates a retail banking operation in
NASB shareholders have been waiting nearly six months to obtain definitive results on a real estate investment company in which it has a significant interest. The stock has suffered somewhat as a result, though in the last month it's up almost 10%.
The bank's shares trade at a mere 70% of the company's breakup value.
Pennant Park Investment (Nasdaq: PNNT) shares are up better than 15% in the last half year and offer a 9.9% dividend yield. The stock's P/E ratio is 7.38 and P/B is 0.95.
Financials? On the Nasdaq? With good fundamentals? Times have changed, man. Better take a closer look at these three value plays from the "tech-heavy" Nasdaq.
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