Low Enterprise Value Stocks: Rewarding Income Investors with Strong Growth

Includes: AE, ELRC, NTP, TRST, UVE
by: Randy Durig

The first quarter of 2011 was surprisingly rewarding again for our income- based selection criteria. The stock performance for the Investment with Income portfolio that was published on Seeking Alpha was strong. For the fourth quarter, the portfolio was up over 7.40 % percent compared to the S&P 500 which was up a very respectable 5.42 %

Our Income and Investment Review portfolio is based on high-dividend-paying, very low or negative enterprise values while still including our established criteria of strong increases in cash flow, earnings, and a selective qualitative review ensuring they have a good business model. The goals are to select, purchase, monitor, and sell companies in an effort to obtain outstanding performing investments while minimizing risk by finding low values for our clients doing all this on a very low cost basis.

The First Quarter is added to the second half of 2010 based on simple math:

Time Investment with Income. S& P 500
First Quarter 2011

7.40 %

5.42 %

Fourth Quarter 2010

22.65 %

9.92 %



First Quarter 2011 performance on our Seeking Alpha listed stocks:


First Quarter 2011

Fourth Quarter 2010

Adams Resources (NYSEMKT:AE)

18.5 %

*28.73 %

Electro Rent (NASDAQ:ELRC)

6.31 %

New to the portfolio


- 6.47 %

*16.64 %

Universal (NYSEMKT:UVE)


New to the portfolio

*Dividends not included but currently average 4.88 % annually based on the initial investment.

Company Current dividend rate is based on review price
Adams Resources (AE) 3.20 %
Electro Rent (ELRC) 4.10%
TrustCo (TRST) 6.10 %
Universal (UVE) 6.10 %
Income and Investment Average 4.88 %

Investors should keep in mind:

  1. The current average dividend of 4.88 is based on our recommended price.
  2. This is a very small sampling over a very short time.
  3. The performance is tracking very close over time to the longer, larger and strong performing sampling of High Cash Stock review with similar criteria excluding the dividend.

The very low or negative enterprise values in the reviews are designed to provide protection from a market selloff. The positive earnings, improved cash flow, profit increase and possible stock price expansion help to increase the often very low values that were identified. So far, our Income and Investment portfolio has done exceedingly well, and well beyond our forecast by such a wide margin that we are very excited to help others.

One must realize that this is a short indicator of performance and there is no guarantee of future success.

Updated portfolio review:

Nam Tai Electronis (NTE) was added during the quarter with our review here. With most of the value in cash and yielding about 2.8% percent in dividends, while providing both strong growth and forecast, they fit the stringent criteria for the Income & Investment Portfolio.

No positions were sold during the quarter.

Disclosure: Both Durig Capital and its clients have positions in all the above positions. Performance is bases on written reports published as High Cash Stock Review.

Disclaimer: These are hypothetical portfolio illustrations and no money was invested by clients or Durig Capital in this enclosed published manner. Hypothetical only takes into consideration all High Stock Reviews or Investment and Income stock position that were written and publicly published plus held for the entire quarter. Any new position or liquidate position that occurred in the published quarter were not included in the performance. This assumes all positions have an equal investment value at the beginning of each quarter. This is purely a hypothetical account and actual performances of individual active accounts have preformed both above and below the hypothetical returns in the past and most probably will in the future. Past returns are no way indicative of any guarantee of any possible future return. Individual suitability and advice should be sought about any particularly matter or circumstance.

Disclosure: I am long AE, ELRC, TRST, UVE.