I screened with Finviz for companies that trade with a Price/Cash ratio of less than 1 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 Price/Cash multiple tells that the companies have significant cash positions relative to their market cap. Here is a look at five companies with market caps of at least $1 billion:
1. Bank of America (BAC) is one of the world's largest financial institutions, serving individual consumers, small-and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 56 million consumer and small business relationships with approximately 5,600 retail banking offices and approximately 16,200 ATMs, and award-winning online banking, with 30 million active users. Bank of America is among the world's leading wealth management companies, and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries.
- Gifford Charles purchased 482,794 shares on June 12 and currently holds 622,291 shares of the company. Gifford Charles serves as a director of the company.
- Donald Powell purchased 7,445 shares on June 8 and currently holds 117,567 shares of the company. Donald Powell serves as a director of the company.
The company reported the second-quarter financial results on July 18 with the following highlights:
|Net income||$0.18 per share|
|Book value||$20.2 per share|
|Cash per share||$11.48|
The stock has a $20.5 price target from the Point and Figure chart. The price target would coincide with the company's book value per share. The stock has not seen any insider selling this year. The stock is currently trading at a P/E ratio of 8.46. The stock is trading above its 200 day moving average, which could act as a good entry point for the stock.
2. General Motors (GM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM's brands include Chevrolet and Cadillac, as well as Baojun, Buick, GMC, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling.
Daniel Akerson purchased 25,000 shares on August 8, and currently holds 272,828 shares of the company. Daniel Akerson is chairman and chief executive officer of General Motors. He joined the company in July, 2009 as a member of the Board of Directors.
The company reported the second-quarter financial results on August 2 with the following highlights:
|Net income||$0.9 per share|
|Cash per share||$21.43|
|Book value||$19.36 per share|
Daniel Ammann, Senior Vice President and CFO, commented during the second-quarter earnings call:
Despite some challenging macroeconomic data coming out of North America, we still believe that U.S. light vehicle sales in 2012 will end up in the 14 million to 14.5 million unit range. Through June, the U.S. light vehicle SAAR was 14.3.
We continue to expect that the average of GMNA results for the second and third quarters will be comparable to the performance in Q1. Second quarter results for GMNA were stronger, in part due to the timing of spending -- of some spending that was deferred to the third quarter. Finally, Europe continues to be extremely challenging, which makes our outlook for the year uncertain.
The stock has a $43.5 price target from the Point and Figure chart. The stock is currently trading at a P/E ratio of 7.22 and a forward P/E of 4.99. I believe the book value of $19.36 per share will act like support for the stock. I might take a long position in the stock in the near future.
3. Genworth Financial (GNW) is a leading financial security company serving the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers across 25 countries. It employs 6,000 people worldwide, boasting a diverse and talented team of professionals.
- William Bolinder purchased 3,000 shares on May 24th. Mr. Bolinder has served as a Director of Genworth Financial since October 2010.
- James Riepe purchased 45,000 shares on May 21st and currently holds 68,000 shares of the company. Mr. Riepe has served as a Director of Genworth Financial since March 2006 and Non-Executive Chairman of the Board since May 2012.
- James Parke purchased 25,000 shares on May 18th and currently holds 300,000 shares of the company. Mr. Parke has served as a Director of Genworth Financial since May 2004.
- Michel Perreault purchased 2,000 shares on May 18th and currently holds 22,791 shares of the company. Michel Perreault serves as Senior Vice President - Chief Risk Officer of the company.
- Thomas Moloney purchased 1,000 shares on May 11th and currently holds 4,000 shares of the company. Thomas Moloney has served as Director of Genworth Financial since October 2009.
- Martin Klein purchased 15,000 shares on May 9th and currently holds 20,084 shares of the company. Martin Klein has been the company's Acting President and Acting Chief Executive Officer since May 2012 and has also been Senior Vice President-Chief Financial Officer since May 2011.
The company reported the second-quarter financial results on July 31 with the following highlights:
|Net income||$0.16 per share|
|Book value||$32.17 per share|
|Shares outstanding||494 million|
|Cash per share||7.90|
A total of six different insiders have bought shares during the last three months. There has been very little insider selling since February 2011. The stock is currently trading at a P/E ratio of 9.78 and a forward P/E of 3.82. I believe the stock is a good pick for a value investor currently.
4. NII Holdings (NIHD) is a provider of differentiated mobile communication services for businesses and high value consumers in Latin America. NII Holdings, operating under the Nextel brand in Brazil, Mexico, Argentina, Peru and Chile, offers fully integrated wireless communications tools with digital cellular voice services, data services, wireless Internet access and Nextel Direct Connect and International Direct ConnectSM, a digital two-way radio.
Kevin Beebe purchased 15,000 shares on May 24 and currently holds 34,521 shares of the company. Kevin Beebe serves as a director of the company.
The company reported the second-quarter financial results on August 7 with the following highlights:
|Net loss||$0.60 per share|
|Shares outstanding||171.4 million|
|Cash per share||$11.5|
|Book value||$19.48 per share|
The updated guidance for 2012 is as follows:
- Total net subscriber additions of about 1.0 million compared to prior guidance of 1.4 million net adds.
- Consolidated operating revenues of about $6.1 billion compared to prior guidance of $7.1 billion.
- Consolidated OIBDA of about $1.0 billion compared to prior guidance of $1.4 billion.
- Consolidated capital expenditures of about $1.5 billion compared to prior guidance of $1.7 billion.
The stock did see some insider selling at above $40 levels back in 2011. After December 2011, there has only been insider buying. I believe the stock could be building a bottom at the current levels. The stock is currently trading at a substantial discount to the book value.
5. Nokia Corporation (NOK) is a global leader in mobile communications whose products have become an integral part of the lives of people around the world. Every day, more than 1.3 billion people use their Nokia to capture and share experiences, access information, find their way or simply to speak to one another. Nokia's technological and design innovations have made its brand one of the most recognized in the world.
- Risto Siilasmaa purchased 333,000 shares on July 30th and currently holds 732,592 shares of the company. Mr. Siilasmaa is Chairman of the Board of Directors of Nokia Corporation.
- Bruce Brown purchased 22,000 shares on July 30th and currently holds 42,850 shares of the company. Mr. Brown has been Board member since May 3, 2012.
- Helge Lund purchased 17,000 shares on July 30th and currently holds 46,596 shares of the company. Mr. Lund has been Board member since May 3, 2011.
- Mårten Mickos purchased 67,500 shares on July 30th and currently holds 88,350 shares of the company. Mr. Mickos has been Board member since May 3, 2012.
- Kari Stadigh purchased 170,404 shares on July 30th and currently holds 400,000 shares of the company. Mr. Stadigh has been Board member since May 3, 2011.
- Stephen Elop purchased 275,000 shares on July 27th and currently holds 425,000 shares of the company. Mr. Elop is President and CEO of Nokia Corporation.
- Henning Kagermann purchased 136,060 shares on July 27th and currently holds 187,977 shares of the company. Henning Kagermann serves as Director of the company.
The company reported the second-quarter financial results on July 19 with the following highlights:
|Net loss||$0.47 per share|
|Shares outstanding||3.7 billion|
|Cash per share||$3.12|
|Book value||$2.95 per share|
- Nokia expects its non-IFRS Devices & Services operating margin in the third quarter 2012 to be similar to the second quarter 2012 level of negative 9.1%, plus or minus four percentage points.
- Nokia expects the third quarter 2012 to be a challenging quarter in Smart Devices due to product transitions.
- Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of approximately $3.7 billion by the end of 2013.
- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS operating margin in the third quarter 2012 to be above the second quarter 2012 level of 0.8%.
- Nokia Siemens Networks continues to target to reduce its non-IFRS annualized operating expenses and production overheads by $1.23 billion by the end of 2013, compared to the end of 2011.
The stock has support currently at $2.25 level (50 day moving average) and resistance at $4 level (200 day moving average). I would recommend buying the shares at the support and selling at the resistance.