What a way to end the year! What else can you say about the volatility and uncertainty as we enter 2019?
Despite Thursday's late-afternoon market uptick in the S&P 500 (+0.9%), there were still a lot of names in the red as investors begin to run out of room to harvest losses for 2018. Micro-caps were in the red again Thursday, as the Russell Microcap Index bucked the positive trend for the day, ending down about 0.3%.
Let's check two mid- and micro-caps out:
Newell Brands
Newell Brands (NWL) (-2.7%) had recovered from the $15 range in late October to $24 earlier this month -- but since then, it's given back 24% to the mid-$18 range.
It's been a rough year for the name, which has been selling off businesses and paying down debt. but despite such moves, NWL is down some 37% year to date and many investors have been shunning it. (That doesn't include Carl Icahn, who has continued to increase his stake.)
NWL currently yields 5% and trades at less than 7x next year's consensus estimates, and I thought the name might rebound this year after a rough 2017. In fact, it was one of my 2018 tax-loss selling rebound candidates. But that was not to be.
JAKKS Pacific
Elsewhere in mid- and micro-cap land, embattled toymaker JAKKS Pacific (JAKK) has continued its December freefall. Despite about a 14% rebound so far on Friday, it's down more than 30% this month.
It appears that investors are clearing out some of the clutter, as JAKK is now trading at less than the $2.26 a share of cash on its books (although it does have $165 million in debt). It's hard to believe this is the same company that Howard Marks' Oaktree Capital made a $20-a-share unsolicited bid for back in 2012.
There's been no additional information since the last earnings call about 18%-stakeholder Hong Kong Meisheng's offer to acquire 51% of the company at $2.95 a share. At that time (late October), the company said that discussions were "ongoing." Meanwhile, JAKK looks like it's trading more like an option than a stock.
