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Ben Graham: Net-Net Newsletter
focuses on net-net stocks that Ben Graham would buy. It is
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Micro-Cap Magic Formula Newsletter
picks companies that have high return on capital and high
earnings yield. It is released on the second Friday of each
Buffett-Munger Best Bargains Newsletter
recommends companies that have high business quality, but traded
at undervalued prices. A younger Buffett would buy this kind of
companies. It is published on the third Friday of each month.
This is the July issue of the Magic Formula Newsletter.
This month's stock is growing at over 25% per year. It owns a
patent protected device that is the only device of its kind that
Medicare will reimburse. And its product is both cheaper
more effective than competing technologies.
But, despite that, the company trades like a company in terminal
That could be changing soon. The company's hit an inflection
point where their growth seems to be accelerating, and the CEO
(who also owns >20% of the stock) has suggested that the
company could be an attractive acquisition target to a larger
player looking to gain a toehold in the market. In fact, he's
gone as far to say that it would be cheaper to buy the company
than it would be for a competitor to actually develop the
technology and go through all of the approval process.
Even without that, another year of 25% growth and some margin
expansion could have the company trading at under 3x EBIT in the
near future. Somehow, it seem unlikely the market can ignore such
rapid growth for that long.
We will buy this week's Magic Formula Newsletter pick on Monday,
Download this month's Microcap Magic Formula
Also don't miss:
June Ben Graham Net-Net Newsletter: A Ben Graham Net-Net with 19
Straight Years of Profits.
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