Today I will round out the 2019 tax-loss selling rebound list. There were more than 200 names to choose from, and yet, as I review the first eight, there is a cringe factor. There are no guarantees that stocks down sharply this year, that are expected to be profitable the next two years trading at less than 15X earnings in those years, will recover next year.
Boise Cascade (BCC) (-37% year-to date) has experienced an awful past three months, with shares falling from $45 in September to less than $24 at Thursday's close. The wood products name was formed in 2004, upon the acquisition of OfficeMax's forest products assets; it went public in 2013. The company has met or exceeded earnings estimates in each of the past five quarters, and trades at less than 9X 2019 consensus earnings estimates and 7.5X 2020 consensus estimates. BCC recently raised its quarterly dividend 29% to 9 cents/quarter, and currently yields 1.5%.
Methode Electronics (MEI) (-39%) has also had a rough run as of late, down 40% since early September, with some of that damage occurring last week when the company reported better than expected earnings but a revenue miss. The company also lowered guidance for the rest of the year. Still, it trades for about 6.5X next year's consensus earnings estimates, and about 5.5X the following year's consensus. The consensus here, however, is very small and estimates will change, but the current low forward PE multiples do leave some room for downward revisions. MEI yields 1.9%.
Athletic footwear name Skechers (SKX) (-38%) is currently trading very near to its 52 week low. The company's balance sheet is fairly solid and SKX ended its latest quarter with $981 million, or about $6.30 per share in cash and investments. The company has been buying back shares at a snail's pace, and should consider deploying more of its cash to buy back shares, initiate a dividend, or a combination. SKX currently trades at just under 12 and 10.5 times 2019 and 2002 consensus estimates, respectively.
Last but not least is PetMed Express (PETS) (-48%). Admittedly, a recent crisis with our beloved family dog, including diabetes, cataracts, glaucoma, blindness and ultimately the removal of her eyes, has me rethinking any pet-related stocks. PETS, which operates as an online pet pharmacy, currently trades at just under 10X the next two year's consensus estimates and yields 4.8%. I had no idea how many medications were available for pets, nor the plethora of ailments that pet owners seek to treat. If you told me even a few years ago that someday I would be administering insulin twice a day to a diabetic dog, I would have said you were crazy. Yet, I do it gladly.
So there you have it. I will be providing occasional updates on the 12 names, and it should be an interesting ride.
