Combining two uncorrelated strategies is one of the best ways to improve returns. By doing so, the risk of underperformance during any one period can be reduced significantly.
Value and momentum are two such strategies that have worked well when used in combination. I decided to highlight a few value/momentum stocks. Below are four stocks with low enterprise value to operating cash flow ratios and strong price performance over the 12 and 6 months.
Five Star Quality Care (FVE)
Five Star Quality Care operates senior living communities, including independent living or congregate care communities, assisted living communities and skilled nursing facilities (see the full description).
- Enterprise Value / Operating Cash Flow: 2.24
- Price to Earnings: 12.46
- 5 Year Sales Growth Rate: 14.81%
- Total Debt to Equity: 30.7%
- Return on Equity: 12.71%
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USA Mobility (USMO)
USA Mobility, Inc. is a provider of wireless communications solutions to the healthcare, government, enterprise and emergency response sectors. The Company operates nationwide networks for both one-way paging and two-way messaging services. In addition, USA Mobility offers mobile voice and data services through third party providers, including BlackBerry devices and global positioning system (GPS) location applications (see the full description).
- Enterprise Value / Operating Cash Flow: 2.68
- Price to Earnings: 9.46
- 5 Year Sales Growth Rate: -9.98%
- Total Debt to Equity: 0%
- Return on Equity: 24.59%
W&T Offshore (WTI)
W&T Offshore, Inc. (W&T) is an independent oil and natural gas producer engaged in the acquisition, exploitation, exploration and development of oil and natural gas properties in the Gulf of Mexico. The Company has acquired rights to develop and exploit new prospects, and has acquired existing oil and natural gas properties in both the deepwater and the deep shelf, while at the same time continuing its focus on the conventional shelf (see the full description).
- Enterprise Value / Operating Cash Flow: 3.56
- Price to Earnings: 8.48
- 5 Year Sales Growth Rate: 3.73
- Total Debt to Equity: 99.46
- Return on Equity: 41.2
Impax Laboratories (IPXL)
Impax Laboratories, Inc., incorporated in 1995, is a technology-based, specialty pharmaceutical company. The Company is focused on the development and commercialization of bioequivalent and brand-name pharmaceuticals. In the generic pharmaceuticals market, the Company focuses on controlled-release generic versions of brand-name pharmaceuticals, covering a range of therapeutic areas (see the full description)
- Enterprise Value / Operating Cash Flow: 4.14
- Price to Earnings: 5.24
- 5 Year Sales Growth Rate: N/A
- Total Debt to Equity: 0
- Return on Equity: 82.93