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.