I preface this column with the same sentiments that I often do, ad nauseam as it were; there're simply not a lot of cheap companies available in this market these days. Its slim pickings for the value investor, however, that does not make the pursuit of value any less fun, it's just more painstaking, and at times born out of market-created inefficiencies.
Here are a handful of names that I consider cheap:
Corning (GLW) -- While the company has enjoyed a solid run between, doubling the fall of 2015 and late 2017, it's down about 19% since reporting fourth-quarter earnings in late January. The market has turned on the name, and I'm not exactly sure of the reasoning. It trades at a very reasonable 14 times 2019 consensus earnings estimates, yields 2.6%, and recently hiked the dividend 15%. In addition, the company continues to buy back shares and has used ample cash and cash flow to cut the share count by 45% since year-end 2011.
Dick's Sporting Goods (DKS) -- A victim of the great specialty retail Armageddon of last summer, while the name has recovered somewhat, it is still down nearly 50% since late 2016. That, a severe price decline alone, is not a good reason in and of itself to take a position in a name. However, DKS is cheap at 10 times next year's consensus estimates, yields about 2.9%, has been buying back shares, and has little debt. Brick and mortar retail may ultimately go the way of the dinosaur, but not yet, and in the meantime, there's still some money to be made. While I, not uncharacteristically played the retail Armageddon scenario through smaller lesser-known names, this one is a bit more mainstream.
Gannett (GCI) -- Talk about a dinosaur, this newspaper publisher is not on most investor's radar any longer. With the separation of the company's broadcasting operations (Tegna, TGNA) completed in 2015, what's left is more mundane, and for that matter, boring. Still, the company is making money, generating cash, and returning money to shareholders in the form of a 6.8% dividend yield. GCI trades at about 9.5 times next year's consensus estimates. TEGNA, in its own right also appears to be cheap at 7 X next years' consensus estimates.
Cooper Tire & Rubber (CTB) -- Another name that has been beaten up recently, shares are down about 30% since January. A disappointing fourth quarter earnings report where the company missed the 63 cent consensus estimate by 13 cents did not help matters. Be that as it may, shares currently trade at a 52 week low, which is at less than 8 times nest year's consensus estimates. Shares also yield 1.5%, and the company has been buying back shares, reducing share count by 19% over the past four years.
