1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Articles (514) 

February Magic Formula Newsletter Released

February 10, 2013

This month's pick is barely trading above the value of its cash. Normally, these cash type bargains are reserved for companies posting massive losses and burning through their assets.

But not this company. Even through the recession, which caused a dramatic slowdown in their end market, they've posted consistently strong profits. And as the economy recovers, their profits should begin to surpass their previous peak earnings.

Even without a recovery, the company is cheap at today's prices. After backing out the cash, the stock trades for less than two times normalized earnings, and the recovery should take that multiple even lower. Their ROIC is over 40% even in down years.

In other words, this is just the type of stock this newsletter looks for — strong business trading at a cheap price, with low risk and high upside.

We will buy the shares on Monday.

Download this month’s Microcap Magic Formula Newsletter.

All the monthly newsletters are included in GuruFocus Premium Membership. If you are not a Premium Member, we invite you for a 7-day Free Trial.

Rating: 0.0/5 (0 votes)


Please leave your comment:

Performances of the stocks mentioned by GuruFocus

User Generated Screeners

daftheadersg hk best
henrikLynch inspiret Oct 17
lajor10Low EV/EBITDA
canidPE >50th percentile of INDUSTR
brucexoct 17 user defined screen
AngryQuality Growth cheap
EnjoylifeDad 1
punjanoot2007a academy+joe
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat