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Three Stocks for the Value Investor, Growth Enthusiast and Insider Follower
Posted by: ABN (IP Logged)
Date: May 5, 2014 01:29PM
When reviewing the financial news I, like many others, usually look for one of three things: a stock that has significant growth prospects but is priced on a reasonable multiple; a stock that is priced on a low valuation compared to earnings or book value; or a stock that has seen recent notable insider purchases. Three stocks that have caught my notice this week are Air Lease Corporation (AL), World Acceptance Corp (WRLD) and Pacific Premier Bancorp Inc. (PPBI).
Air Lease Corporation is a company that leases jet aircraft to airlines worldwide. It is priced on a PE multiple of just over 20 but has seen earnings growth of 77% over the past two years, and consensus EPS forecasts point to annual growth of 29% over the next five years. The company was set up by Steven Udvar-Hazy who has worked in the airline business since fleeing the Soviet occupation of Hungary in 1958. In 1973 Mr. Udvar-Hazy co-founded International Lease Finance Corporation which he sold to AIG in 1990 although he remained as CEO until 2010 growing the business into the world’s largest aircraft lessor. After retiring from ILFC, Udvar-Hazy set up Air Lease Corporation offering leasing services to the largest airlines including United Continental, British Airways, Emirates and KLM. The company has grown rapidly and now owns 146 single-aisle and 31 twin-aisle jet aircraft as well as 16 turboprop aircraft. Airline customers benefit from tax benefits as well as cheap access to capital and improved flexibility over owning the assets. Trading on a forward PE of 16.1 and PEG of 0.69 Air Lease looks interesting for investors seeking growth at a reasonable price.
Possible value at World Acceptance Corp trading on a PE of 8.37 with consensus earnings forecasts pointing to annual growth of 15% over the next five years. World Acceptance Corp is a payday lender offering short-term loans at high rates of interest. Some concerns surround the industry about possible changes in regulation, including the introduction of interest rate caps, by the Consumer Financial Protection Bureau. The concerns have hit valuations, but lenders argue that short-term loans are competitive with many credit card offerings and can save borrowers money by helping them to avoid unauthorized overdraft charges and fees. Since 2005 the company has grown revenues from $206 million to $596 million and net income from $34 million to $106 million. Consensus EPS forecasts for 2015 and 2016 are $10.85 and $11.77. Priced on a forward PE of 6.47 might make World Acceptance Corp interesting for value investors.
Finally, eight insiders made purchases of Pacific Premier Bancorp as the company finalized its acquisition of Infinity Franchise Holdings and reported a 33% increase in net income. Steven R. Gardner, president and chief executive officer who added $142,000 of stock to his holding, commented, “The $78.8 million in loans added through the acquisition provides us with attractive risk-adjusted yields.”
The author is a blogger at SurgingEarnings.com
Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC registered investment adviser prior to making any investment decisions.
Disclosure: The author holds no positions in any of the stocks mentioned nor has any intentions to initiate any in the next 72 hours.
Stocks Discussed: AL, WRLD, PPBI,