Bill Nasgovitz is the founder, President, and portfolio manager for Heartland Advisors, Inc. Mr. Nasgovitz and the Heartland funds are value stock investors who have developed a history of strong results which has earned him a reputation as being a legendary investor and stock guru. In this article from "The Guru Investor
," Mr. Nasgovitz states:
"The most important change in my 40 years of investing has probably been in investors’ time horizons. Today the majority of investors–Ben Graham would call them speculators–are focused so closely on this week, this month and this quarter. Stocks are bought and sold on penny deviations from short-term estimates, which is mind-boggling. Crazy as it is, we can’t complain–it just creates more opportunities for investors with longer time horizons."
The Heartland Advisors portfolios are invested in all these great opportunity stocks below, and could generate very large returns from here. Three of the companies below, Accuray (ARAY
), Tongxin (TXIC), and Aurico (AUQ
) have started new up trends and could break out soon. For each company below, the amount of stock owned by Heartland is provided with a link:
Force Protection (FRPT)
shares are trading at $4.87. The 50-day moving average is about $4.81 and the 200-day moving average is about $5.12. Earnings estimates are about 36 cents for 2011, and 46 cents for 2012. This gives FRPT shares a PE ratio of only about 12 times earnings. This maker of armored vehicles has a very strong balance sheet with about $140 million in cash, and a book value of $4.63. See that here
The opportunity in Force Protection: Heartland Advisors, Inc., is reported to own about 5.7 million shares
. This company has great balance sheet and could be a takeover target for a large defense contractor.
Tongxin International (TXIC)
is trading for about $1.50 per share. This company manufactures vehicle body structures, and has corporate headquarters in Birmingham, Michigan, with manufacturing plants in Asia. These shares have seen a trading range of 94 cents to $4.85 in the past 52 weeks. The 50 day moving average is $1.18 and the 200 day moving average is $1.61. These shares could move back to around the highs around $5 in the short term and even up to $8 to $10 later, as investors get back on board this rebound story. A couple of major upcoming catalysts could send this stock much higher and Ibis Management recently purchased a significant stake.
The opportunity in Tongxin: Heartland Advisors, Inc., is reported to own about 1 million shares,
which is about 7.4 % of the entire company. Tongxin recently announced a major expansion investment of about $5 million in order to meet growing demand for their products. See that and the company's complete investor presentation
(pdf). This stock has been trending up on higher than average volume and could be set to break out soon.
Accuray, Inc. (ARAY)
shares are trading at $8.41. Accuray makes and markets the CyberKnife system, which is a image-guided robotic radio surgery system used to treat tumors. The 50-day moving average is about $7.79 and the 200-day moving average is about $7.70. Earnings estimates are about 5 cents for 2011. This company has a very strong balance sheet
with about $142 million in cash, and a book value of $2.98.
Staar Surgical Co. (STAA)
shares are trading at $5.29. The 50-day moving average is about $5.40 and the 200-day moving average is about $5.51. Earnings estimates are about 6 cents for 2011, and 15 cents for 2012. Staar is a maker of implantable lenses for cataracts and refractive surgery.
The opportunity in Staar: Heartland Advisors, Inc., is reported to own about 3.6 million shares.
This stock has not been moving much lately, but if it runs over $6, it could be starting a significant new uptrend.
Federal Signal (FSS)
is trading around $6.29. Federal Signal makes a variety of products for vehicles such as sirens, aerial platforms, etc and it is based in Illinois. These shares have traded in a range of $4.91 to $7.79 in the last 52 weeks. The 50- day moving average is $6.31 and the 200-day moving average is $6.37. FSS is estimated to earn about 28 cents per share in 2011, and 61 cents in 2012.
The opportunity in Federal Signal: Heartland Advisors, Inc., is reported to own about 7.1 million shares
. This is a total stake of about 11.5% of the entire company. FSS pays a 24 cent dividend, which is equivalent to a 3.6% yield. This pays you to hold the stock while you wait for a higher share price.
Spirit Aerosystems Holdings, Inc. (SPR)
shares are trading at $20.59. The 50-day moving average is about $22.01 and the 200-day moving average is about $22.36. Earnings estimates are about $1.71 for 2011, and $2.27 for 2012. This gives SPR shares a PE ratio of only about 10 times earnings. Spirit is a maker of commercial aircraft structures, and is based in Kansas.
Aurico Gold (AUQ)
shares are trading at $11.71. The 50-day moving average is about $10.10 and the 200-day moving average is about $8.65. Earnings estimates are about 88 cents for 2011, and $1.11 for 2012. This gives AUQ shares a PE ratio of only about 12 times earnings. Aurico is a gold and silver mining company based in Canada, with projects in Mexico.
The data is sourced from Yahoo Finance. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes.
Disclosure: I am long TXIC and may buy all the stocks listed here soon.