When you think microcap stocks you probably have a clear picture in your head of a certain kind of stock. Maybe you’re thinking no earnings, likely in biotech or a similar risky business, and a market cap of a few million dollars.
And you’d be right for a part of the micro-cap universe. But just because a stock is labelled as a microcap doesn’t mean it fits your particular mold.
Let’s take a look at 5 diversified microcaps that do business in many different industries. They all have P/E ratios of under 10, and none of them has a market cap lower than $230 million.
First, there’s the largest member of our group, with a market cap of just under $285 million, Pingtan Marine Enterprise Ltd. (NASDAQ: PME). Pingtan is in the global fishing business and based in China.
Pingtan has been in business for over 20 years and has a P/E ratio of just over 9. The company even pays a small dividend and has done so for the past 14 straight quarters.
Speaking of dividends, how about a microcap with a whopping 10.25% dividend yield…take that Mr. Powell. Our second company is Whitehorse Finance, Inc. (NASDAQ: WHF), a small company that finances other small companies.
Whitehorse takes advantage of inefficiencies and imbalances in the small-cap credit market. They lend money to privately held small-cap companies to finance their operations.
The financing is managed by H.I.G. Capital, which controls over $25 billion. So for the price of a microcap you get large company management combined with a juicy dividend.
Our third micro-cap has pulled back to support around $3 after breaching $5.50 earlier in the year. Cloud Peak Energy Inc. (NYSE: CLD) is a coal company based in the Powder River Basin of Wyoming. (Beautiful country if you ever get a chance to visit, and it’s easy to fly into the small town of Gillette).
Cloud Peak has been ramping up exports to Japan. Their trading partner in Fukushima recently exercised an option to increase imports there by 20%.
With a market cap of slightly under $250 million, Cloud Peak sports a P/E of under 4. Even a small bounce off of the $3 support level could net a tidy profit.
After some wild and damaging price swings, our fourth company seems to have found its footing. J. Jill, Inc. (NYSE: JILL) is a women’s clothing retailer based in Quincy, Massachusetts.
J. Jill has a market cap of $234 million and a P/E of 7.57. J. Jill has shared the struggles of many retailers in the past year. But the stock chart shows a break above short term resistance at $5.30, and a rising wedge. Continued strength could close the previous price gap to just over $7.
Finally, how about a household name for our fifth microcap. This isn’t your father’s Eastman Kodak Company (NYSE: KODK). Kodak, coming in with a market cap of $232 million, has a P/E ratio of only 4.24.
Kodak still makes film, but they also make software and flexible packaging stations among other items. They are even developing a possible blockchain solution for digital photographic rights management.
Five micro-cap companies in five very different industries, all with P/E ratios under 10. The next time you think micro-cap make sure you keep an open mind to the investing possibilities in this sector.
Disclaimer: The author and Spotlight Growth have no positions in any of the stocks mentioned in this article. Nor do either have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This article is for informational, entertainment, and opinion-based purposes only and should not be viewed as a recommendation to buy/sell any security. Please seek investment advise from a licensed professional to determine if any of the securities are right for your portfolio.
Article By: Steven Adams
