“Triple Threat for Total Return” by John Buckingham in Forbes reviewed long term performance data from 1926 to present (this data set will be the good subject of post one day) to conclude small caps, dividend payers, and value stocks outperform. Therefore, quod erat demonstrandum, investors should look for all three today. Give me a good large growth non dividend payer anytime but I’m an investing child of the nineties.
He recommends three stocks that would fit this screen (not, necessarily three stocks from a screen – an important difference but his method is not specifically expressed in the article):
Lexmark LXK @ 18 (in article, 21.62 at close today)
Nash Finch NAFC @19
Navios Maritime Holdings NM @3.58
I would not touch any Greek Shipping short of a reincarnated Themistocles.
Buckingham says they are at 35% of book value. Perhaps but we can find safer values elsewhere and there is little to gain from deep research here that would benefit other stocks. Dry bulk shipping is in a sour mood; there are other ways to play that rebound. If you’re really into shipping of another sort, perhaps one of those ways is Nash Finch but that is too low growth low margin for my tastes.
Lexmark maybe a Kodak or Xerox in the making but with an ever-so-slightly safer chart (where “safe” means I at least know where I’d get out — a return under say 18) with very solid revenue and cash on hand, I think is a more interesting play.
The gap between 18 and 21.xx may be attributed to the announcement of a $100m buyback and that they’ll dump the inkjet business. They acquired Perceptive Software in 2010 and claim it too will be profitable next year. They have a 6% dividend yield. Should have gotten my Forbes in the mail sooner.