I screened with Finviz for companies that trade with a forward P/E of less than 5 and checked if the companies had any insider buys during the last three months. I chose to check the insider buys to narrow the list and to add more confidence that these stocks could be good picks now. The low forward P/E shows that analysts believe the companies have great future earnings power. I wrote the part I of "5 Companies Trading At A Forward P/E <5 With Recent Insider Buying" on July 31st, part II on August 3rd, part III on August 4th and part IV on August 8th. Here are five additional companies that I found:
1. Molycorp (MCP) is a leading rare earths and rare metals company, and combines a world-class rare earth resource at Mountain Pass, California, with world-class ultra-high-purity rare earth and rare metal materials processing capabilities. With 26 locations across 11 countries, Molycorp is vertically integrated across the global rare earth mine-to-magnetics supply chain. It produces rare earth magnetic materials as well as a variety of high-purity, custom engineered products from 13 different rare earths (lights and heavies) as well as five rare metals (gallium, indium, rhenium, tantalum and niobium), and the transition metals yttrium and zirconium. Through its Molycorp Magnequench subsidiary, the company is a leading global producer of neodymium-iron-boron (NdFeB) magnet powders, used to manufacture bonded NdFeB permanent rare earth magnets. Through its joint venture with Daido Steel and Mitsubishi Corporation, Molycorp expects to begin manufacturing next-generation, sintered NdFeB permanent rare earth magnets in early 2013.
- Brian Dolan purchased 12,153 shares on June 13. Mr. Dolan is a director of Molycorp.
- John Ashburn purchased 5,000 shares on June 13 and currently holds a total of 179,252 shares of the company. Mr. Ashburn is Executive Vice President, General Counsel and Secretary of Molycorp Minerals.
- Mark Smith purchased 1,000 shares of the company's Series A Mandatory Convertible Preferred Stock at $53.68 share price and currently holds 2,000 of these shares. Mark Smith also holds 774,318 shares of the common stock. Mr. Smith is Chief Executive Officer, member of the Board of Directors and a shareholder of Molycorp Minerals.
The company reported second-quarter financial results on August 2 with the following highlights:
|Net loss||$0.71 per share|
Earnings decreased substantially from the prior year period as a result of lower product volumes, lower prices, costs related to the Project Phoenix transition, and other transaction costs related to acquiring Molycorp Canada. Adjusted loss per diluted share of $0.03 reflects operational expansion items, out-of-ordinary business expenses, and certain non-cash items as compared to U.S. GAAP loss per share, such as $52.8 million related to the acquisition of Molycorp Canada, $19.5 million in consolidated inventory write-downs, and $8.4 million in purchase accounting adjustments impacted earnings, among others.
As of August 2, 2012, the company is re-affirming its annual production of REO equivalent products to be in the range of 8,000 mt to 10,000 mt for the full year across its Mountain Pass, Sillamäe and Tolleson facilities, which does not include production from its newly acquired Molycorp Canada operations. The company continues to believe it is well positioned for year-over-year sales growth given the Mountain Pass ramp-up, existing customer orders, a growing pipeline of global business opportunities, and its acquisitions.
Capital expenditures for Project Phoenix Phase 1 and Phase 2, commissioning and start-up, and other capital projects at the company's Molycorp Mountain Pass facility are expected to be approximately $289 million on an accrual basis for the remainder of 2012. All other capital expenditures across the company (including Molycorp Canada) are expected to be approximately $17 million for the remainder of 2012.
I wrote an article about Molycorp on June 16. The stock is currently down almost 50% from the June 2012 period. I believe the long-term potential is still the same and would recommend buying the stock at the current levels.
2. Supertel Hospitality (SPPR) is a self-administered real estate investment trust that specializes in the ownership of select-service hotels. The company currently owns 94 hotels comprising 8,283 rooms in 23 states. Supertel's hotels are franchised by a number of the industry's most well-regarded brand families, including Hilton, IHG, Choice and Wyndham.
- Kelly Walters purchased 2,000 shares on June 27 and currently holds 259,000 shares of the company. Mr. Walters joined Supertel Hospitality as President and Chief Executive Officer in April 2009.
- Efanur Stock Corporation purchased 10,000 shares on June 26 and currently holds 27,524 shares of the company. Efanur Stock Corporation also holds 3,000,000 Series C Cumulative Convertible Shares. Efanur Stock Corporation is a 10% owner according to SEC filings.
The company reported first-quarter financial results on May 15 with the following highlights:
|Net loss||$0.20 per share|
Kelly Walters, Supertel president and CEO commented during the first quarter earnings release:
"We believe that the 2012 first quarter marks a critical, positive shift in the company's future direction and sets it on a restorative and transformational path by putting into motion the financial and human capital required to restructure and adapt the hotel portfolio to contemporary market expectations. This will be a multi-year process, but we are confident in our direction."
The company could be a turn-around story. I would recommend only a small speculative position currently.
3. TeleCommunication Systems (TSYS) is a world leader in highly reliable and secure mobile communication technology. TCS infrastructure forms the foundation for market leading solutions in E9-1-1, text messaging, commercial location and deployable wireless communications. TCS is at the forefront of new mobile cloud computing services providing wireless applications for navigation, hyper-local search, asset tracking, social applications and telematics. Millions of consumers around the world use TCS wireless apps as a fundamental part of their daily lives. Government agencies utilize TCS' cyber security expertise and professional services for mission-critical communications. Headquartered in Annapolis, MD, TCS maintains technical, service and sales offices around the world.
- Reza Jafari purchased 10,000 shares on May 29 and currently holds 30,787 shares of the company. Mr. Jafari joined the TeleCommunication Systems board of directors in August 2010.
- Richard Young purchased 10,000 shares on May 22 and currently holds 373,586 shares of the company. Mr. Young serves as Executive Vice President and Chief Operating Officer and is a member of Board of Directors.
The company reported second-quarter financial results on July 26 with the following highlights:
|Earnings per share||$0.03|
Tom Brandt Senior Vice President and Chief Financial Officer commented during second-quarter earnings call:
Management has updated full year guidance for EBITDA in the range of $47 million to $51 million. We expect that adjusted net income for the full year 2012 will be in the $18 million to $23 million, or $0.32 to $0.39 using 50 million shares.
The stock surged after the second-quarter earnings report. I believe the next resistance for the stock could be at $2 level.
4. Ultralife Corporation (ULBI) serves its markets with products and services ranging from portable power solutions to communications and electronics systems. Through its engineering and collaborative approach to problem solving, Ultralife serves government, defense and commercial customers across the globe.
- Robert Shaw purchased 2,352 shares on May 24 and currently holds 19,952 shares of the company. Mr. Shaw serves as a director of the company.
- Michael Popielec purchased 5,620 shares on May 22-23 and currently holds 150,000 shares of the company. Mr. Popielec serves as Director, President and Chief Executive Officer of the company.
The company reported second-quarter financial results on August 2 with the following highlights:
|Net loss||$0.18 per share|
For 2012, management continues to expect high-single to low-double digit year-over-year revenue growth for its Communication Systems segment and China operations. However, given the continued softness in the Battery and Energy Products segment, the company's largest segment, management expects year-over-year total sales to decline by between 20% and 30%. Having taken actions to reduce spending and align capacity, management believes that a return to operating profitability for the second half of 2012 is achievable with operating margin in the low- to mid-single digits. The magnitude of the first half operating loss is expected to result in a total year operating loss.
The stock tanked following the earnings release. I believe this dip provides a buying opportunity for the stock.
5. UniTek Global Services (UNTK) is a provider of engineering, construction management and installation fulfillment services to companies specializing in the telecommunications, broadband cable, wireless, two-way radio, transportation, public safety and satellite industries. UniTek has created a scalable operating platform, enabling each UniTek subsidiary to deliver quality services to its Fortune 200 customers. UniTek, based in Blue Bell, PA, utilizes a diverse workforce of approximately 6,400 deployed in 102 locations in the United States and Canada.
- Robert Stott purchased 2,500 shares on June 13 and currently holds 24,059 shares of the company. Mr. Stott serves as a director of the company.
- Dean MacDonald purchased 11,000 shares on May 24 and currently holds 54,390 shares of the company. Mr. MacDonald serves as a director of the company.
- Michael O'Donnell purchased 10,000 shares on May 23 and currently holds 31,559 shares of the company. Mr. O'Donnell serves as Chairman of Board of Directors.
The company reported the second-quarter financial results on August 8 with the following highlights:
|Shares outstanding||18.6 million|
|Net loss||$0.03 per share|
During the second-quarter earnings release the company provided the following guidance:
Based on current expectations for growth in UniTek's primary end markets, the company is maintaining its expectations for full-year 2012 revenue of approximately $500.0 million, representing growth of 16% over 2011. Factoring in the same expectations, adjusted EBITDA for 2012 is expected to be approximately $50.0 million, with earnings per share expected to be approximately $(0.14) and net income after certain non-cash adjustments projected to be $0.70 per share.
For the third quarter of 2012, the company currently expects revenue of between $142.0 and $147.0 million, with adjusted EBITDA of between $16.5 and $17.5 million.
The stock surged after the second-quarter financial results. The 200 day moving average is currently at $3.6 which could act as a resistance for the stock.
Disclosure: I am long MCP.