The market rally over the past week has boosted many stocks, but there are still a number of very cheap financial stocks. These two small cap companies are trading well below their 52 week highs and are trading at bargain valuations based on their book values and price to earnings ratios. Because they are small cap stocks, they might be more volatile than large cap stocks but they are also more likely to provide larger returns.
FXCM, Inc. (FXCM) shares are trading for $10.42. FXCM is an investment brokerage company specializing in currency trading. The 52 week range for these shares is $8.80 to $15.34. The book value is stated at $6.17. The market cap of this company is not much more than the value of cash and marketable securities on the balance sheet.
According to Yahoo Finance, FXCM has a market capitalization of approximately $180 million and total cash of about $193 million. FXCM pays a dividend of 24 cents per year which is equivalent to a 2.3% yield. With earnings estimates of 82 cents for 2011 and $1.20 for next year, these shares are cheap with a price to earnings ratio of 8 times forward earnings.
Hilltop Holding, Inc. (NYSE:HTH) shares are trading for $8.88. Hilltop is a property and casualty insurance company, based in Texas. The 52 week range for these shares is $8.60 to $10.77. The book value is $11.58. What's remarkable is that the market cap of this company is less than the value of cash and marketable securities on the balance sheet. According to Yahoo Finance, Hilltop has a market capitalization of approximately $565 million and cash levels of about $649 million. For full earnings and other details read this.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only.