Theragenics Corporation: This Speculative $2 Stock Is Heading Higher

| About: Theragenics Corporation (TGX)
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It has been a very tough few months in the market and after today's miserable jobs report, June looks like it will have a negative trading open. The sell-off has been particularly brutal on Energy & Materials stocks as well as small caps. One of my few small cap positions recently that has actually increased in value despite the selloff is Theragenics (NYSE:TGX) which just reported a stellar quarter and looks to be heading higher.

Recent positives for TGX:

  • Earnings increased 104% to almost $1mm in the recently completed quarter.
  • Revenues also increased a healthy 7% to $21.6mm.
  • The company recently got approved and is rolling out a new product line.
  • After a very long basing pattern, the stock looks like it is breaking out and crossed back over its 200 day moving average (see chart).

(Click to enlarge)

4 reasons TGX is still a bargain at under $2 a share:

  • The company has approximately $16mm or 25% of its market capitalization in net cash.
  • The stock is selling near the bottom of its five year valuation range based on P/B, P/S and P/CF.
  • TGX sells at 77% of annual revenues, despite growing its sales at 10% annually over the last five years.
  • The stock is cheap at just 75% of book value and less than 8 times operating cash flow.

Disclosure: I am long TGX.