Category Archives: ktcc

5 Quality Stocks Under $15

In July I listed 5 stocks under $15 based on a combination of value and technical factors.  The returns of those 5 stocks, along with the IWM benchmark ETF, are below:

Trend July 6th Close October 7th Close Return
UFPT UFP Technologies, Inc. Here 9.05 11.95 32.04%
SLI SL Industries, Inc. Here 12 14.19 18.25%
TGS Transportadora de Gas del Sur Here 3.24 3.66 12.90%
KTCC Key Tronic Corporation Here 4.81 6.36 32.22%
DINE Rewards Network Inc. Here 13.51 14.41 6.66%
Avg 20.42%
IWM 59.04 68.41 15.87%

The primary purpose of this screen/system is to seek low-priced stocks still trading at reasonable valuation ratios with price momentum and a positive trend.The second goal is to be long high beta, riskier stocks when the market is fundamentally and technically favorable.  This is accomplished by a) investing in stocks with price momentum b) investing when the S&P 500 EPS estimate is trending upward c) investing when the S&P 500 risk premium is above 1% (for a full explanation see here) and d) investing only when the underlying benchmark is above the 200 day moving average on the day of rebalancing/screening.

As of today, the above 4 requirements are being meant.  Thus, the top 5 stocks under $15 based on quality, value, and momentum are below.  Each company has a price/sales ratio below 1, low price to earnings, and low long term debt/equity (AEY has the highest LT Debt/Equity at .39). The drawback of the qualifying stocks is that they are all small or microcap stocks that may have relatively thin trading volumes. However, all have a minimum daily volume of at least 10k shares.

Of special note is that RCM technologies (RCMT) is currently fighting a hostile bid takeover from CDI Corp at $5.20 share. The outcome of this takeover attempt could affect the share price in the near future.

The ranking system used is compliments of stockscreen123.com. Investors could also establish their own custom criteria using free screens such as those at finviz.com.

Ticker Name Trend October 7th Close MktCap Industry
UFPT UFP Technologies, Inc. Here 11.95 75.3 Containers & Packaging
SLI SL Industries, Inc. Here 14.19 84.91 Electronic Instr. & Controls
JADE LJ International, Inc. Here 4.3 108.6 Jewelry & Silverware
AEY ADDvantage Technologies Group Here 2.99 30.43 Communications Equipment
RCMT RCM Technologies, Inc. Here 4.96 65.68 Computer Services

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5 Quality Stocks Under $15

Below is a list of quality stocks trading under $15 as of July 6th.  I screened for the stocks using stockscreen123.com which has an almost limitless supply of stock screen criteria as well as the ability to backtest the results of various screens.  Previous results from this screen can be seen here.

The criteria to screen and test the stocks are 1) Not over-the-counter 2) Price is less than $15 3) Close is greater than the 200 day simple moving average 4) S&P 500 EPS estimate is trending upward 5) S&P 500 risk premium is above 1% (for a full explanation please see here).  The purpose of points 4 and 5 are to be out of the market when conditions are not favorable.  These two criteria have worked well over the past decade to avoid bear markets.  It is a similar concept to the moving average systems I track on my site and the ones written about in Faber’s The Ivy Portfolio.

I then ranked the top 5 based on stockscreen123’s Quality-Value-Growth-Momentum model.  Backtesting this strategy, assuming 1% slippage, a $100 investment using the model grew to $520.10 vs $86 in the S&P 500 (excluding dividends for both) while being out of the market most of 2008 and part of 2009.  The screen rebalanced every 4 weeks.  A 3 year backtest returned $162.80 versus $67.20 in S&P 500. 

Ticker Name Trend Analysis Last Rank MktCap Industry
UFPT UFP Technologies, Inc. Here 9.05 99.96 55.58 Containers & Packaging
SLI SL Industries, Inc. Here 12 99.93 72.53 Electronic Instr. & Controls
TGS Transportadora de Gas del Sur Here 3.24 99.92 514.83 Oil & Gas Operations
KTCC Key Tronic Corporation Here 4.81 99.91 49.22 Computer Peripherals
DINE Rewards Network Inc. Here 13.51 99.9 119.1 Advertising

No positions

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Screening for Top Stocks Under $15

Below is a list of quality stocks trading under $15 as of May 29th.  I screened for the stocks using stockscreen123.com which has an almost limitless supply of stock screen criteria as well as the ability to backtest the results of various screens.

The criteria to screen and test the stocks are 1) Not over-the-counter 2) Price is less than $15 3) Close is greater than the 200 day simple moving average 4) S&P 500 EPS estimate is trending upward 5) S&P 500 risk premium is above 1% (for a full explanation please see here).  The purpose of points 4 and 5 are to be out of the market when conditions are not favorable.  These two criteria have worked well over the past decade to avoid bear markets.  It is a similar concept to the moving average systems I track on my site and the ones written about in Faber’s The Ivy Portfolio.

I then ranked the top 5 based on stockscreen123’s Quality-Value-Growth-Momentum model.  Backtesting this strategy, assuming 1% slippage, a $100 investment using the model grew to $552.90 vs $87.70 in the S&P 500 (excluding dividends for both) while being out of the market most of 2008 and part of 2009.  The screen rebalanced every 4 weeks.  A 3 year backtest returned $213.60 versus $70.50 in S&P 500.

Ticker Name Free Trend Analysis Rank MktCap Industry
RBI Sport Supply Group, Inc. Here 99.99 167.63 Recreational Products
KTCC Key Tronic Corporation Here 99.97 56.28 Computer Peripherals
SLI SL Industries, Inc. Here 99.95 71.2 Electronic Instr. & Controls
UFPT UFP Technologies, Inc. Here 99.92 54.89 Containers & Packaging
PUDA Puda Coal, Inc Here 99.91 172.29 Coal

No Positions

Tiny Titans Portfolio with a 200 Day Benchmark

On Friday I detailed AAII’s Tiny Titans stock screen.  Using the beta stockscreen123 I backtested the Tiny Titans portfolio only when the Russell 2000 was above its 200 day moving average.  The goal is to reduce potential drawdowns by only investing in the strategy when the overall market is in a long term uptrend. By adding this simple rule, the Tiny Titans screen avoided some of the significant drawdowns in 2007 and 2008.  Other potential trading strategies may work better on the individual companies in the Tiny Titans list, such as the one I detailed in-depth here which involves placing stop losses on individual positions.

The 8 year performance of the strategy results in a $100 investment turning into $349.70 versus $137.30 in the Russell 2000 (dividends excluded) when rebalanced every 4 weeks and excluding slippage/commissions:

A 5 year investment turned to $138.30 versus $100.20 in RUT.

A 3 year investment turned into $84.10 versus $77.30 in RUT.  It suffered a large drawdown in August/September 2008 and October 2007 when the Russell 2000 was briefly above the 200 day moving average but suffered large negative months.

The current list of stocks matching the criteria are:

Ticker Name Last Free Trend Analysis MktCap
VVTV ValueVision Media, Inc. 3.93 Here 127.08
ROIAK Radio One, Inc. 3.3 Here 180.6
LEE Lee Enterprises, Incorporated 3.8 Here 170.51
ATSG Air Transport Services Group 2.42 Here 153.57
LNET LodgeNet Interactive Corp. 5.99 Here 135
NAVI NaviSite, Inc. 2.89 Here 107.81
CMRG Casual Male Retail Group, Inc 3.17 Here 149.51
LBY Libbey Inc. 10.32 Here 156.41
MGPI MGP Ingredients, Inc. 7.6 Here 126.73
BIOF BioFuel Energy Corp. 2.8 Here 95.29
SPCHA Sport Chalet, Inc. 2.02 Here 28.53
SALM Salem Communications Corp 4.92 Here 116.48
IHR Interstate Hotels & Resorts, 2.25 Here 72.35
PXLW Pixelworks, Inc. 3.4 Here 45.56
BONT The Bon-Ton Stores, Inc. 8.44 Here 156.63
CVGI Commercial Vehicle Group, Inc 4.99 Here 113.51
BELM Bell Microproducts Inc. 4.57 Here 145.76
KV.A K-V Pharmaceutical Company 3.08 Here 153.84
IEC IEC Electronics Corp. 6.13 Here 54.8
TXIC Tongxin International Ltd 8.15 Here 100.32
SBSA Spanish Broadcasting System I 0.74 Here 48.06
KTCC Key Tronic Corporation 5.62 Here 56.71
NXST Nexstar Broadcasting Group, I 4.39 Here 124.81
WILC G. Willi-Food International L 6.96 Here 71.46
ARTX Arotech Corporation 1.89 Here 27.2

Tiny Titan Stocks

AAII (American Association of Individual Investors) released their January 31st screen results this week.  One of their more popular–and profitable–screens is the ‘O’Shaughnessy Tiny Titans’.  Since 1998 the screen has produced cumulative results of over 2000%.  However, since 2007 the screen has struggled significantly along with the overall market.

The screen looks for companies with a market cap between $25 million and $250 million, a price to sales of less than 1, excludes over the counter stocks, and finally ranks the top 25 based on the greatest relative strength over the past 52 weeks.  This creates a list of highly volatile and risky stocks.  However, there may be some names of interest worthy of further research.  In addition, one potential strategy would be to pair the portfolio with a hedge by simultaneously shorting the Russell 2000 via RWM with a portion of your portfolio.  Or, an investor could only participate in the strategy when an index such as the Russell 2000 was above a long term moving average.  My suggestion for using a moving average system was inspried in part by Mebane Faber’s The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets and also by Tom Lydon, author of The ETF Trend Following Playbook: Profiting from Trends in Bull or Bear Markets with Exchange Traded Funds.

I ran the AAII Tiny Titans screen using stockscreen123 and came up with the following 25 names. If there is interest among readers, it could be a portfolio I track for free on my blog along with several others already available for free. I also looked at the 3 and 5 year performance when the portfolio was rebalanced every 4 weeks.  The past 3 years the screen returns were approximately -33%  excluding slippage and commissions.  The past 5 years the cumulative return was approximately 33%.  Thus, this screen struggled mightily in negative markets.  Below is the current list ranked on their 52 week return as of 2/18/10.  The list will differ from the AAII list because that list was updated 1/31/10. Personally, this is not a screen I would blindly invest in without further investigation of each  name and also without using stop losses and a hedge. If an investor wanted to run this screen for free he or she could do so using any number of free stock screens such as the one available at Finviz.

No position in the stocks mentioned

Ticker Name Last Free Trend Analysis MktCap
VVTV ValueVision Media, Inc. 3.93 Here 127.08
ROIAK Radio One, Inc. 3.3 Here 180.6
LEE Lee Enterprises, Incorporated 3.8 Here 170.51
ATSG Air Transport Services Group 2.42 Here 153.57
LNET LodgeNet Interactive Corp. 5.99 Here 135
NAVI NaviSite, Inc. 2.89 Here 107.81
CMRG Casual Male Retail Group, Inc 3.17 Here 149.51
LBY Libbey Inc. 10.32 Here 156.41
MGPI MGP Ingredients, Inc. 7.6 Here 126.73
BIOF BioFuel Energy Corp. 2.8 Here 95.29
SPCHA Sport Chalet, Inc. 2.02 Here 28.53
SALM Salem Communications Corp 4.92 Here 116.48
IHR Interstate Hotels & Resorts, 2.25 Here 72.35
PXLW Pixelworks, Inc. 3.4 Here 45.56
BONT The Bon-Ton Stores, Inc. 8.44 Here 156.63
CVGI Commercial Vehicle Group, Inc 4.99 Here 113.51
BELM Bell Microproducts Inc. 4.57 Here 145.76
KV.A K-V Pharmaceutical Company 3.08 Here 153.84
IEC IEC Electronics Corp. 6.13 Here 54.8
TXIC Tongxin International Ltd 8.15 Here 100.32
SBSA Spanish Broadcasting System I 0.74 Here 48.06
KTCC Key Tronic Corporation 5.62 Here 56.71
NXST Nexstar Broadcasting Group, I 4.39 Here 124.81
WILC G. Willi-Food International L 6.96 Here 71.46
ARTX Arotech Corporation 1.89 Here 27.2