Value Ideas: Five Stocks on the Radar of Predatory Capitalists

Value Ideas: Five Stocks on the Radar of Predatory Capitalists

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The BBC may have made a booking mistake when trader Alessio Rastani came on and shocked viewers with comments like “the collapse is coming” and “Goldman Sachs rules the world”. His interview has since gone viral, and you can watch it below.

When asked what can be done to make investors more confident in the markets he calmly replied:

“Personally, it doesn’t matter. I’m a trader… if I see an opportunity to make money I go with that. So, for most traders it’s not about, we don’t really care that much, how they’re going to fix the economy, how they’re going to fix the whole situation. Our job is to make money from it, and personally I’ve been dreaming of this moment for three years.”

I have a confession which is I go to bed every night I dream of another recession, I dream of another moment like this. Why? Because people don’t seem to maybe remember, but the 30’s depression wasn’t just about a market crash, there were some people who were prepared to make money from that crash, and I think anybody can do that.”

Mr. Alessio Rastani later said he meant every word he said, but was surprised the interview gained so much media attention. “I don’t think it was news. For someone to say what I said, I thought everybody already knew this kind of stuff.”

It turns out that Rastani was indeed a booking mistake. But what he said resonated with people, whether or not he is a professional trader.

Many experienced traders know that the best time to profit is when the world is blowing up. That’s because one of the key ingredients to investing success is having enough liquidity at a time when the market is down sharply.

If an investor has the liquidity to buy at discounted prices, they can greatly benefit when the market rebounds.

So which stocks are on the radars of these predatory capitalists?

For ideas, we started with a universe of about 150 stocks that appear to be deeply undervalued relative to their P/E, PEG and P/FCF ratios.

From this universe, we looked at profitability data, and identified a list of deeply undervalued stocks that have a track record of outperforming the profit margins of their competitors.

Do you think these undervalued, profitable stocks are primed for a rebound? Use this list as a starting point for your own analysis.

List sorted alphabetically.

 

1. Atlas Air Worldwide Holdings Inc. (AAWW, Earnings, Analysts, Financials): Provides air cargo and outsourced aircraft operating solutions worldwide. P/E ratio at 8.68, PEG ratio at 0.77, P/B ratio at 0.88, and price / free cash flow ratio at 10.86. TTM gross margin at 22.51% vs. industry average at 17.78%. TTM operating margin at 12.84% vs. industry average at 10.21%. TTM pretax margin at 13.02% vs. industry average at 9.93%.

 

2. FBL Financial Group Inc. (FFG, Earnings, Analysts, Financials): FBL Financial Group, Inc., through its subsidiaries, sells individual life insurance and annuity products in the United States. P/E ratio at 5.77, PEG ratio at 0.87, P/B ratio at 0.65, and price / free cash flow ratio at 1.86. TTM gross margin at 21.01% vs. industry average at 16.96%. TTM operating margin at 20.8% vs. industry average at 13.62%. TTM pretax margin at 19.22% vs. industry average at 12.25%.

 

3. Gannett Co., Inc. (GCI, Earnings, Analysts, Financials): Operates as a media and marketing solutions company in the United States and internationally. P/E ratio at 4.46, PEG ratio at 0.99, P/B ratio at 0.94, and price / free cash flow ratio at 3.63. TTM gross margin at 45.18% vs. industry average at 43.24%. TTM operating margin at 19.18% vs. industry average at 16.81%. TTM pretax margin at 14.61% vs. industry average at 12.68%.

 

4. Protective Life Corp. (PL, Earnings, Analysts, Financials): Protective Life Corporation and its subsidiaries engage in the production, distribution, and administration of insurance and investment products in the United States. P/E ratio at 4.46, PEG ratio at 0.56, P/B ratio at 0.37, and price / free cash flow ratio at 2.6. TTM gross margin at 17.64% vs. industry average at 16.97%. TTM operating margin at 17.64% vs. industry average at 13.63%. TTM pretax margin at 14.32% vs. industry average at 12.26%.

 

5. Symetra Financial Corporation (SYA, Earnings, Analysts, Financials): Operates as a financial services company in the life insurance industry in the United States. P/E ratio at 5.23, PEG ratio at 0.55, P/B ratio at 0.42, and price / free cash flow ratio at 1.05. TTM gross margin at 18.63% vs. industry average at 16.96%. TTM operating margin at 18.63% vs. industry average at 13.62%. TTM pretax margin at 17.% vs. industry average at 12.25%.

 

 

(By Becca Lipman. List compiled by Eben Esterhuizen, CFA. Data sourced from Finviz. Profitability data sourced from Fidelity.)

 

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One response to “Value Ideas: Five Stocks on the Radar of Predatory Capitalists”

  1. friv 7 says:

    Rastani, what he said and the relevant details we can understand. Everything took place and basically is relatively good.

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