Fortress Investment Group: 6 Reasons To Pick Up This $4 Stock Yielding Over 5%

| About: Fortress Investment (FIG)

A recent, large insider buy caught my eye the other day and put Fortress Investment Group (FIG) back on my radar (I already have a small position in the equity). The stock has a rock bottom valuation and a yield of over 5%. Earnings growth is projected to return strongly in FY2013 and I believe patient investors who pick up this equity on the cheap will be rewarded significantly over the long term.

6 reasons Fortress is a great long term pickup at under $4 a share:

  • It yields a robust 5.6% and has a solid balance sheet (over $70mm in net cash). It just reinstituted its dividend payment and I would look for further dividend increases if the company hits consensus earnings targets in 2013.
  • Director David Barry just picked up $1.4 million worth of shares, tripling his stake in the company. Other insiders have not sold a share in over a year.
  • The mean analysts' price target on the stock is over $5 by the six analysts that cover the stock. Credit Suisse has an "Outperform" rating and a $7 price target on Fortress.
  • It is selling for less than 6 times forward earnings and has a very low five year projected PEG (.43) as well.
  • The company should be a major beneficiary of the improving markets, especially as investors and institutions feel more comfortable with risk and move funds from low risk assets.
  • The stock has long term technical support at just under current prices (See Chart).

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Disclosure: I am long FIG.