Three Value Stocks Off The Radar Screen

At this time of the year, especially when the market has a bullish tone, small (IWM) and mid cap (MDY)  stocks are likely to outperform-YTD they are up about 25%. MicroCaps also tend to do well in the  Q4-Q1 time frame because investors tend to be less cautious, anticipate a “January effect” of outperformance in smaller cap stocks and any good news from thinly traded stocks gives a disproportionate turbo boost. Here are three stocks trading at a low Price to Sales (P/S), low book value and with deal and/or revenue growth potential.

  • Corgenix (CONX.OB  $0.08, Range 07-.19)  Market Cap $3.36M   Ann. Revenues ~$8M   Autoimmune Diagnostics
  • ImmuCell (ICCC $3.30, Range $2.47-4.40) Market Cap  $9.80M   Ann. Revenues ~$4M  Animal Health
  • IVAX(IVD $0.56, Range $0.41-.80)  Market Cap $15.5M   Ann. Revenues~$16M Human Diagnostics

The key issues with microcap stocks trading at low valuations are usually: balance sheet, continuing losses, new product pipeline and lack of a business concept or story. With each of these three companies there are different issues but they have all been around a long time and have failed to ramp-up revenue growth and create a unique core technology.

Of the three companies Corgenix has the lowest P/S but weakest balance sheet with Stockholder Equity of $4M. Immucell has the strongest balance sheet with $5M in cash and the long term history of the Company over 20 years has been stable but unexciting. Ivax is a roll-up of three Dx companies and has been bleeding cash with little sales growth.

Although none of these companies are profitable they all have turnaround potential.We look forward to more in- depth coverage when events warrant it.

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