In an uncertain market like the one we are currently facing, I have found finding stocks with a healthy yield is a solid defensive strategy. Every now and again I am fortunate to find an equity with a solid and growing yield, good growth prospects and that is starting to attract insider buying. One such stock is Daktronics (DAKT).
7 reasons DAKT offers a compelling case for value and growth investors at $7.50 a share:
- An insider picked up nearly $300K in new shares in early July.
- DAKT yields 3.2% and the dividend payouts have grown at an over 22% annual clip over the past five years.
- Analysts expect revenues to increase 6% to 8% in FY2012 and FY2013. The company earned 20 cents a share in FY2011, but is expected to make 31 cents in EPS in FY2012 and 44 cents in FY2013.
- The stock is selling near the bottom of its five year valuation range based on P/B, P/S and P/CF.
- The company has over $50mm in net cash on its balance sheet (over 15% of market capitalization).
- The stock is selling at 17 times forward earnings, a discount to its five year average (27.1).
- The stock is starting to bounce off around the same technical bottom it established at the depths of the financial crisis (see chart).
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DAKT over the next 72 hours.