Hilary Kramer is the editor of GameChangers, Breakout Stocks Under $10, and High Octane Stocks, published by InvestorPlace Media. She is also a weekly commentator on Nightly Business Report, and author of The Little Book of Big Profits from Small Stocks. She has 25 years of investing experience, first as an analyst, then as a portfolio manager, investment banker, and hedge fund manager, and has managed more than $5 billion in global private equity and publicly traded investments. She received an MBA from the Wharton School of Finance at the University of Pennsylvania and within a decade was recognized as one of the best equity investors on Wall Street.
These lesser known bargains, some of which trade for under $10, are good bets for investors to consider, says Hilary Kramer, editor of GameChangers.
Bargain-bin stocks under $10. We’re here with Hilary Kramer, who is going to tell us about some of her favorites.
Well, thank you for inviting me. There are so many stocks that really got hit hard last year when the S&P rating for the US came down and we saw the Russell 2000 decimated, and many of these companies; well, they’re finally ready to come back. Let you give me some examples.
The first is Asset Acceptance Capital (AACC). This stock is only $5.90; it’s a company that buys, for pennies on the dollar, debts that are owed—basically accounts receivable—from utilities, telecom operators, retailers
Asset Acceptance has a great record of being able to recover the losses. Many companies decide, let me just get this off my books—and Asset Acceptance has done this for billions of dollars, and we’re going to see the company come back very strong, especially with the economy finally bottoming out and coming back to us.
Another company—one of my absolute favorites—is Cablevision (CVC). Do you know that Cablevision is right down there under $12 right now? Been as high as in the mid to upper $30s; $36 to $37 range in the last 52 weeks?
This is a cable company, Cablevision, with over 3 million subscribers in the New York area. But concerns about FiOS coming in and competing; concerns about the Dolan family and their ownership and maybe any lack of leadership since Cablevision lost their chief operating officer—his name was Rutledge—to Charter has just brought this stock down and down hard.
There was also a lot of investment that was made to fend off the competition, meaning FiOS. But Cablevision really has their act together, selling off assets including their cinema business. And they’ve done an excellent job at retaining and growing their actual cable base, especially the cable base that has the bundled telephony and high-speed Internet access.
With CVC, you can double your money. Just think about how badly that one has fallen.
Another stock that I love is Janus Capital Group (JNS), the mutual-fund company. We all remember their Greek god advertising in 2000, known for their Internet stocks. But did you know this company has almost $170 billion under management?
You have growth. You have value. You have dividend-yielding stocks; a whole institutional organization; an excellent mathematical and quantitative fund. You’re talking about $1 billion market cap but $170 billion of assets under management. Eventually, when volumes come back, and the economy recovers, we’ll see one of the big players want to take out a company like Janus.
The last one that I would love to bring up is Magic Software (MGIC). Magic is an Israeli company that has a platform that’s cloud-based, allowing companies that are mainly focused on sales and have to work with a large global sales force to bring all of the diverse different applications all onto one platform.
So if you’re an officer of a company that has a large sales force, a lot of customers, you can check inventory, your accounting, your orders, and sales management all on one platform—hand-held via the cloud. That’s the direction that we’re going to, and that’s new innovation.
MGIC just came off hard, an Israeli company that got lost in the crowd. But they have international clients from all over the world, everyone you could imagine from Adidas to Boeing (BA). So you want to own a company like Magic.