Our small cap stock this week is CTI Logistics Limited (CLX), who provide transport and logistics services around Australia.
Some of the reasons it is our small cap stock of the week include:
- It’s Perth based and, as we know, WA has been relatively free from COVID, so Sales are up, profits are up, long haul to Eastern states is up.
- The market capitalisation is only around $72m, so it’s not huge, but the upside of that is that it has low broker coverage, so there is no forecast intrinsic value, no forecast earnings per share, etc – all of which is good for us, because it often means we can find these diamonds in the rough for the broader marketplace picks up on them.
- The directors hold about 40% of the stock and we like it when the board has skin in the game.
- A low price-to-operating cashflow ratio of 2.32
- One downside – financial health has dropped from strong to satisfactory, but it often oscillates, might be seasonal.
- Dividend Yield over 4%, which makes it attractive to investors looking for high dividends.
- Consistently Increasing Equity scores a zero over last six halves, but it has been increasing over the last 4 halves, which is a strong sign.
- It has a net equity per share of 1.18, which is higher than current share price of 96c – so we can buy it for less than the fire sale price.
- PE ratio is 8.82, quite low, in fact it is the lowest PE it has had in six reporting periods.
- Small average daily transaction volume of $8K, making it only suitable to smaller investors.
- Quality score 83%
- QAV score 0.36.