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My scope is to assist private companies both abroad and domestic wishing to go public in the U.S. We invest in the company in the earliest stages, and assist in coordinating their audit, legal RTO or IPO. We also offer M&A identification, execution and consulting, Investors relations... More
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  • ASFI And CTO: Solid Plays Under The Radar 0 comments
    Sep 5, 2014 8:28 AM | about stocks: ASFI, CTO

    (click to enlarge)Investors looking for value often rely on hardcore numbers as a justification, and this approach mostly works pretty accurately. However, investors can easily miss turnaround plays where efficiency and restructuring gains are yet to reflect in the financial performance. Asta Funding (NASDAQ: ASFI) and Consolidated-Tomoka Land (NYSE: CTO) are such examples where fundamentals are improving. In fact, some of the gains are already visible in earnings and margins.

    Asta Funding is a consumer receivable asset management company that purchases and manages performing and non-performing consumer receivables. These receivables often consist of accounts where debtors make partial or irregular monthly payments. While the business is reminiscent of the perils of the subprime market, a look at the company's financial performance is enough to get an idea about the profitability in this business.

    Profitability is greatly helped by its lean balance sheet. In the most recent quarter, the company reported earnings of $1.44 million on a top line of $10.2 million, translating into an excellent margin of 14.1 percent. This is up from a 6.5 percent margin the company maintained in the previous full fiscal year. The stock currently trades at a discount to its book value which adds to its attractiveness.

    Consolidated-Tomoka Land is another solid stock which is not tracked by analysts. This Florida-based company focuses on real estate, income properties, and golf operations and has been making steady progress with its operations. The company's revenue jumped 59.2 percent in 2013 to $25.8 million, while profits grew manifold to $3.7 million. This trend of double-digit profit margins has continued in the subsequent quarters as well and bodes well for the prospective investors.

    Consolidated-Tomoka's profits have been growing at a solid rate and this is helped by suitable acquisitions of income properties. Recently, the company completed acquisition of 52,665 square-foot building located within a retail shopping center in Daytona Beach for around $5.3 million. The building is leased to American Signature, with a remaining term of approximately 6 years. It is a shame that the stock is not tracked regularly by analysts, but moves like this may soon change this scenario and unlock tremendous shareholder value. Following the results announcement, the stock has already gained sharply in the last week, which might be a deterrent for certain investors, but the company's improving financial performance is putting valuations in place.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: ASFI, CTO
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