Forbes Best Small Companies: Part 4
December 22nd, 2008 by Jae Jun
This is a continuation of my search for the best small companies from the 200 listed in Forbes 2008.
You can refer to the results here: 1-15 | 16-32 | 33-70 | 71-130 | 131-160 | 161-200
The companies ranked 71-130 has yielded 8 results. To recap, below are the criterias of how the companies are being filtered.
- Immediately exclude financials (don’t understand or know how to value them)
- Run the companies through the intrinsic value spreadsheet with the PE as the growth rate, but capped at 15%. The selected companies shall exhibit;
- Positive, consistent and growing cash flows.
- Consistent margins. Fluctuating/decreasing margins over several years will not be accepted unless the other criterias are outstanding.
- Above average returns from capital investments (CROIC, ROE, ROA)
- Companies should have at least 5 years of operating history
- The companies that make the cut will then be reviewed individually
Results
- Portfolio Recovery Associates (PRAA) – collects portfolios of defaulted consumer debt
- Techne (TECH) – develops hermatology controls and biotechnology products
- Computer Programs and Systems (CPSI) – designs hospital IT support systems
- Rocky Mountain Chocolate Factory (RMCF) – manufactures chocolate and other confectionery products
- Company with a long history and very honest and candid management.
- Credo Petroleum (CRED) – explores for oil & gas
- I was surprised that Credo made it past the filter as it is a business typical of high capex but it is one of the rare oil & gas companies that is cash flow positive. Margins are stable for a cyclical company.
- Dionex (DNEX) – makes analytical instruments for chemicals industry
- Neogen (NEOG) – develops products for food and animal safety
- Gen-Probe (GPRO) – develops and markets clinical diagnostic products
Remarks
I noticed that as I kept going down the list, the quality of the businesses started to decline. Margins are inconsistent, returns are low or non-existent as well as growth in revenue and FCF.
Disclosure
No positions at time of writing
[tags]PRAA, TECH, CPSI, RMCF, CRED, DNEX, NEOG, GPRO, forbes[/tags]
Tags: forbes 200, Stock Analysis
Posted in Featured, Stock Analysis | 3 Comments »
Forbes Best Small Companies Project: Part 3
December 11th, 2008 by Jae Jun
This is a continuation of my search for the best small companies from the 200 listed in Forbes 2008.
You can refer to the results here: 1-15 | 16-32 | 33-70 | 71-130 | 131-160 | 161-200
The companies ranked 33-70 has yielded 10 results.
- Nutrisystem (NTRI) – provides weight loss management and fitness programs
- NTRI was part of my recent short term strategy. Sold as it went up to intrinsic value. Can be considered as faddy. No moat.
- Bankrate (RATE) – operates online consumer banking and finance network
- Personally used the site many times and a company with excellent numbers.
- Blue Nile (NILE) – retails diamonds and fine jewelry online
- Another company I have personal experience with during my search for a wedding ring.
- Raven Industries (RAVN) – makes industrial, agricultural, construction and aerospace products
- Chattem (CHTT) – markets OTC health care and consumer products
- Became interested after reading a detailed article on Forbes. Could be a JNJ alternative with higher growth prospects. Equally recession proof as JNJ.
- Jos. A. Bank Clothiers (JOSB) – retails men’s clothing and apparel
- Ansys (ANSS) – develops engineering simulation software
- Diodes (DIOD) - manufactures and distributes semiconductors
- Competitive no moat industry but price is too cheap to ignore. Made the list based on its cheap price.
- FactSet Research Systems (FDS) – provides online financial information to investment community
- Meridian Bioscience (VIVO) – markets diagnostic test kits and specialty biological products
There are a few that are trading below my estimated values but only NTRI and DIOD seems to offer a deep discount at this time.
View the graph below to my comments and estimated fair values.
[tags]NTRI,RATE,NILE,RAVN,CHTT,JOSB,ANSS,DIOD,FDS,VIVO, stock analysis, forbes 200[/tags]
Disclosure
No positions in any stocks at time of writing
Tags: ANSS, CHTT, DIOD, FDS, forbes 200, JOSB, NILE, NTRI, RATE, RAVN, Stock Analysis, VIVO
Posted in Featured, Stock Analysis | 4 Comments »
