While the spotlight remains on the Nasdaq 100 big cap tech and social media “growth” names that dominate market commentary, it’s possible to identify little known value stocks among the Russell 2000 small caps. There are never guarantees of success but these may be overlooked stock market goods.
By applying the general principles of Benjamin Graham’s work — back when he was a Forbes contributor — these 4 unheralded equities may fit the mold. They have low price-earnings ratios (lower than the Shiller S&P 500 p/e), decent earnings over time, low debt, pay dividends and trade under their book value.
There’s more to it than that, of course — these are the basics for the beginning of further research.
4 Russell 2000 Value Stocks.
AdvanSix is a New York Stock Exchange-traded company in the chemicals industry with a market capitalization of $720 million. This year’s earnings are off by 66% and the growth over the past 5 years comes to 4.65%. Analysts expect next year’s EPS to increase by 29.50%.
The stock trades at a 4% discount to its book value with a price-earnings ratio of 8.18. The debt-to-equity ratio is .36. AdvanSix is relatively lightly traded for an NYSE-listed security with an average daily volume of just 174,000 shares. The company offers investors a dividend of .32%.
The price chart below shows that the stock has dipped below its 200-week moving average, bounced in November and now trades below it again.
Heritage Commerce is a regional bank based San Jose, California, Nasdaq-traded, with a market cap of $590 million. The entire sector got hit by the March, 2023 collapse of Silicon Valley Bank and you can see the steepness of the drop clearly on the weekly chart below.
Earnings this year are off by 2.29% and the record over the past 5 years shows growth of 12.04%. The stock is trading at an 11% discount from book with a price-earnings ratio of 8.24. The debt-to-equity ratio sits at .11. Heritage Commerce pays a 5.38% dividend.
The weekly price chart shows a decent recovery off of the April/May, 2023 lows and the price now trades above both the 50-week and the 200-week moving averages.
NACCO Industries is a natural resources company in the thermal coal industry. The Plano, Texas-based firm traces its beginnings back to 1910. Market capitalization is $266.45 million. The NYSE-listed NACCO is very lightly traded with an average daily volume of just 13,000 shares.
Now available for purchase at 62% of its book value, the company’s price-earnings ratio is 14.62. Debt-to-equity sits at .07. Price-to-free cash flow is a solid 10.45. NACCO pays a dividend of 2.42%.
The weekly price chart below shows that the stock peaked in May, 2022 at just above $60 and now goes for $35.48. After a June, 2023 sell-off to $30, it now trades above both the 50-week and the 200-week moving averages.
Veritex Holdings is a regional bank headquartered in Dallas, Texas. Market cap is $1.22 billion, the price-earnings ratio is 8.48 and the stock trades at 82% of its book value. The debt-to-equity ratio is .29. Veritex pays a 3.56% dividend.
On the weekly price chart, you can see that like most regional banks, the collapse of Silicon Valley Bank in March, 2023 took the price further down. The Texas bank bottomed in May, 2023 at $15 and has since recovered to $22.46.
Stats courtesy of FinViz.com.