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<< Return to Part I

Below is a list of seven stocks with 20% to 30% ROE that are currently selling for less than book (P/B < 1), sorted by ROE:

This list of equities is offered as speculation. P/B and ROE should be used in conjunction with other statistics to determine investment opportunity. Please perform thorough fundamental and technical research before investing.

Five Star Quality Care Inc. (FVE) has a P/B of 0.52 with a ROE of 28.02%. The company holds an average analyst price target, from a total of three analysts, of $4.73, 54.57% above its current price of $3.06.

The stock has used the $3.00 price level as strong support throughout 2012. As it is now trading just above this level, at $3.06, investors may find opportunity in this entry point.

(click charts to enlarge)

Mercantile Bank Corp. (MBWM) has a P/B of 0.91 with a ROE of 26.50%. The company holds an average analyst price target, from a total of two analysts, of $16.00, 4.92% above its current price of $15.25.

The stock has been trading within a steep, up-trending price channel since last October. Though Mercantile Bank Corp. is near the top of its 52-week range ($7.51 to $15.49), fundamental investors may find value in the company.

FirstCity Financial Corp. (FCFC) has a P/B of 0.77 with a ROE of 25.21%. The company is currently well above its analyst price target of $4.50 but, fundamentally, still shows value.

The stock broke above resistance at $8.00 at the beginning of the year and has since used this price level as support. Now trading just above this support, at $8.47, investors may find a technical value at this entry point.

American Capital, Ltd. (ACAS) has a P/B of 0.60 with a ROE of 24.27%. The company holds an average analyst price target, from a total of four analysts, of $11.38, 22.63% above its current price of $9.28.

Though not a strong level of support, American Capital, Ltd. appears to show price stability near $8.75. As the stock is now trading a bit above this level, investors may find a better entry point if the stock continues to dip and consolidates near $8.75.

Republic Bancorp Inc. (RBCAA) has a P/B of 0.86 with a ROE of 21.61%. The company's analyst price target is $23.00, 6.48% above its current price of $21.60.

The stock is currently trading in a steep downtrend but may find support at the $20.00 price level. If consolidation does not occur at this level, stronger support should be found at the $16.00 price level.

American International Group, Inc. (AIG) has a P/B of 0.54 with a ROE of 21.29%. The company holds an average analyst price target, from a total of fourteen analysts, of $37.50, 23.15% above its current price of $30.45.

The stock has been trading within an up-trending price wedge since December of last year. Recent sessions indicate a possible break below up-trending support which, if broken, AIG may fund additional support at the $28.00 level.

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Preferred Bank (PFBC) has a P/B of 0.91 with a ROE of 20.81%. The company holds an average analyst price target, from a total of four analysts, of $14.38, 14.49% above its current price of $12.56.

The stock has been trending sharply upward since the beginning of the year. Though Preferred Bank is near the top of its 52-week range ($7.00 to $13.35), fundamental investors may find value in the company.

Source: 15 Stocks With Over 20% Return On Equity Selling For Less Than Book, Part II: 20% To 30% ROE