Russell 2000
For the value investor, here are some small caps from the Russell 2000 Index, which are now trading below book value and paying dividends.
The index itself recently fell to a new 52-week low, an indication that value may now be present among the components. Nothing is guaranteed but that’s how Benjamin Graham found stocks.
Several of these names are very small caps with low average daily volume, making it difficult for large institutions to invest in, but that doesn’t mean retail investors should avoid them.
These represent a possible means of diversification for those who aren’t content with only holding high-profile tech and social media stocks, some of which have become more volatile of late.
Russell 2000 small caps.
Adopt assets is a mortgage insurance company headquartered in Raleigh, North Carolina. Formerly known as Genworth Mortgage Insurance, the company provides underwriting services and underwrites State Housing Finance Agency (HFA) loans.
Now trading at a price-to-earnings ratio of just 6.45 and at a 2% discount to book value, the market cap stands at $4.30 billion. This year’s earnings are down 9.94% — EPS growth over the last 5 years is 9.76%. Enact Holdings pays a dividend of 4.12%.
Enact Holdings Daily Price Chart, 10 29 23.
BTUs
is a thermal coal producer based in St. Louis, Missouri, in operation since 1883 with primary operations in the United States and Australia. The company also produces coal in Japan, Taiwan, India, Brazil and other countries. The market capitalization is $3.30 billion.
Peabody Energy shares trade at a 2% discount to book value with a price-to-earnings ratio of 3.30. Long-term debt is largely exceeded by equity. This year, profits fell by 41% — growth over the last 5 years increased by 40.60%. Investors receive a dividend of 2.14%.
Peabody Energy Daily Price Chart, 10 29 23.
Popular Bank (Marietta, Ohio) is a financial institution based in Marietta, Ohio, founded in 1902 and now operates 133 branches in Ohio, Kentucky, West Virginia, Virginia, Washington, DC and Maryland. The bank’s market capitalization stands at $960.65 million.
The stock trades with a price-to-earnings ratio of 7.90 and at 97% of its book value. This year’s earnings are up 10% and over the last 5 years, EPS growth is 11.37%. Price to free cash flow is 8.93. Average daily volume is light, at just 92,000 shares. Banque Populaire pays a dividend of 5.71%.
Peoples Bancorp Daily Price Chart, 10 29 23.
PBF Energy is an oil and gas refining and marketing company headquartered in Parsippany, New Jersey.
According to the company’s websiteit is “one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oils, petrochemical feedstocks, lubricants and other petroleum products in the United States.”
The stock’s price-to-earnings ratio is just 1.92 and trades at a 5% discount to book value. This year’s profits are down 49% — the last 5 years’ EPS is up 43.70%. The market capitalization is $5.70 billion. PBF pays a dividend of 1.81%.
PBF Energy Daily Price Chart, 10 29 23.
I’m no longer on Twitter — I moved to Discussions.net.