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It’s a “crisis is opportunity” kind of story. One of the effects of major stock market sell-offs is that certain stocks with decent fundamentals get re-priced. It’s as if goods you’ve been wanting to purchase for a long time are suddenly within your price range.
It may be that the overall economic situation has changed so much that the fundamentals are misleading. You never know. On the other hand, it’s probably worthwhile to notice which stocks may now be showing up on the value screens of large hedge funds and other financial institutions.
So, here are 6 to look at:
Altra Industrial Motion Company makes mechanical power transmission products. The company is Massachusetts based and NASDAQ traded.
Altra Holdings weekly price chart, 3 7 20.
Right now, it’s selling at a 15% discount to book value. The price/earnings ratio is 12.9 at a time when the p/e of the S&P 500 is 22.3. Earnings last year were excellent and the 5-year record is very good. Altra’s long-term debt exceeds its shareholder equity, a metric to be carefully considered. The current ratio is positive.The company pays a 2.62% dividend.
Hawaiian Holdings is a regional airline with headquarters in, guess where: Honolulu. The stock trades on the NASDAQ.
Hawaiian Holdings weekly price chart, 3 7 2020.
With a price/earnings ratio of just 3.7 and trading at a 24% discount to book value, Hawaiian Airlines is out of favor. One problem is that shareholder equity is exceeded by the amount of long-term debt. Last year’s earnings were good and they’ve been good over the last 5 years as well. They pay a 2.72% dividend. The short float comes to 11.57%.
Ingersoll Rand is a machinery company, based in Ireland and New York Stock Exchange listed.
Ingersoll Rand weekly 3 7 20
The company is selling for an 8% discount to book with a price/earnings ratio of just 4.96. This is another where the long-term debt exceeds shareholder equity — but the current ratio remains positive. Earnings are positive for last year and the 5-year record is good. Ingersoll Rand is paying a large dividend: 7.63%.
Kelly Services is NASDAQ traded, headquartered in Michigan and a well-known name in the staffing and outsourcing areas.
Kelly Services weekly price charts, 3 7 20.
The stock is available at half its book value. The price/earnings ratio sits at 5.5. Kelly has an excellent earnings record last year and over the past 5 years. The company has zero long-term debt. They are paying a 1.91% dividend. Average daily volume is on the light side: just over 200,000 shares.
PVH Holdings makes Calvin Klein, Tommy Hilfiger, Van Heusen and other brands of clothing. Based in New York City, the company is NYSE traded.
PVH Holdings weekly price chart, 3 7 20.
With a price/earnings ratio of 8.4, you can pick up shares for 85% of book value. Earnings have been great last year and on the 5-year time frame. Long-term debt is less than shareholder equity. PVH pays a small dividend — just .22% — but it’s a dividend.
WestRock is a packaging and containers company with headquarters in Atlanta. The stock trades on the New York Stock Exchange.
WRK weekly 3 7 20
Trading at a 34% discount to its book value, the price/earnings ratio is a relatively low 9. Earnings are green for the past year and the past 5 years. A concern would be that long-term debt exceeds shareholder equity. Meantime, the current ratio is positive. WestRock is paying a dividend of 6.18%.
These stocks aren’t necessarily buys — it’s just that, right here, they are showing the kind of metrics that value investors typically look for.
Stats courtesy of FinViz.com.
I do not hold positions in these investments. No recommendations are made one way or the other. If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.