Talk about cheap. These small-cap companies are trading for less than their book value.
Three of them are home builders, which should be of interest to Berkshire Hathaway Inc. (BRK.A, Financial) (BRK.B, Financial) fans as the huge conglomerate recently added big names from that sector. However, it did not add these three, probably because of the small capitalizations – but they are still the type of value stocks that, if they were larger, Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) might consider.
The other company is a dealer of new and used boats.
Beazer Homes
Beazer Homes USA Inc. (BZH, Financial) is a residential construction company with its corporate headquarters in Atlanta. This year’s earnings look very good as they are up by 76%. The past five years' earnings growth is 48%. Analysts consensus estimates for next year’s earnings comes in at 16% or over.
The stock trades on the New York Stock Exchange with a price-earnings ratio of just 4.48, significantly lower than the Shiller price-earnings ratio for the Standard & Poor’s 500, which now sits at 30. It is available for purchase right now at a 20% discount to its book value. The amount of long-term debt is just slightly less than shareholder equity.
The company's market capitalization is $906 million. When compared to D. R. Horton’s (DHI, Financial) market cap of $38 billion, it is apparent why Beazer is considered a small cap. Average daily volume is relatively light at 459,000 shares. Beazer Homes does not pay a dividend.
MarineMax
MarineMax Inc. (HZO, Financial) operates luxury marinas and retails recreational boats and yachts in addition to other associated products. The company says it has 130 locations in 21 states and worldwide. The stock has a market capitalization of $713 million, trades with a price-earnings ratio of just 5.53 and at just 80% of book value.
Earnings growth over the past five years is an impressive 51% and this year’s increase is a solid 30.40%. Analyst estimates for next year are less outstanding with a decrease of 12% expected.It is a positive that shareholder equity is about twice the amount of long-term debt.
For a NYSE-traded company, average daily volume is light at 308,000 shares. MarineMax does not pay a dividend.
Landsea Homes
Landsea Homes Corp. (LSEA, Financial) is a Nasdaq-traded homebuilder based in Dallas with a market capitalization of $365 million. According to its website, the company “has developed homes and communities in New York, Boston, New Jersey, Arizona, Florida, Texas and throughout California in Silicon Valley, Los Angeles and Orange County.”
The stock trades at just 57% of its book value with a price-earnings ratio of 7.19. The past five-year earnings growth is a spectacular 198% and this year’s growth comes in at 49%. Price-to-free cash flow is 7.82. Long-term debt is exceeded by shareholder equity.
Average daily volume is a light 245,000 shares. Landsea is not paying a dividend.
Taylor Morrison Home
Taylor Morrison Home Corp. (TMHC, Financial) is a residential construction company headquartered in Scottsdale, Arizona with a market capitalization of $4.79 billion. The stock trades with a price-earnings ratio of 4.82 and at a 6% discount from its book value. Shareholder equity is greater than long-term debt.
Earnings this year are up by 74% and for the past five years, by 105%.
The NYSE-listed name shows an average daily volume of 1.06 million shares. Taylor Morrison pays no dividend.
