It has been a very tough few months in the market and after today's miserable jobs report, June looks like it will have a negative trading open. The sell-off has been particularly brutal on Energy & Materials stocks as well as small caps. One of my few small cap positions recently that has actually increased in value despite the selloff is Theragenics (TGX) which just reported a stellar quarter and looks to be heading higher.
Recent positives for TGX:
- Earnings increased 104% to almost $1mm in the recently completed quarter.
- Revenues also increased a healthy 7% to $21.6mm.
- The company recently got approved and is rolling out a new product line.
- After a very long basing pattern, the stock looks like it is breaking out and crossed back over its 200 day moving average (see chart).
(Click to enlarge)
4 reasons TGX is still a bargain at under $2 a share:
- The company has approximately $16mm or 25% of its market capitalization in net cash.
- The stock is selling near the bottom of its five year valuation range based on P/B, P/S and P/CF.
- TGX sells at 77% of annual revenues, despite growing its sales at 10% annually over the last five years.
- The stock is cheap at just 75% of book value and less than 8 times operating cash flow.
Disclosure: I am long TGX.
