These three stocks sell different products, have very dissimilar track records and varying amounts of risk but all of them could arguably represent a buying opportunity for investors. With low debt (around 20%-30% of equity) and strong reputations, who knows how long they'll last at these prices?
One of my favourite small cap stocks for long-term value is IMF Australia (ASX: IMF). IMF finances legal claims where the total claim size is over $5 million. The company's exceptional record of funding successful cases has enabled it to take its services overseas to New York in the United States.
Since the company has no control when settlements will be met or court cases heard, earnings can be lumpy. This could give potential investors a great buying opportunity. With a market cap of $243 million, fully franked dividend of 3.8% and a P/E of 18, IMF has great long-term potential.
As a shareholder, the company you own should work for you. Management for Tassal Group (ASX: TGR) has been doing just that. This year it pulled the plug on the amount of salmon it exports internationally and signed a number of new contracts. Management is expecting demand to outweigh supply in coming years and will look to take advantage of its position to drive-up revenues. Despite increasing nearly 150% in the past 12 months the stock is well priced, pays a dividend of 3.2% and has a debt to equity ratio of 23%.
The last company for watchlists is Ten Network Holdings (ASX: TEN). Initially, I took a very sceptical view of the stock. However, it now boasts small amounts of debt, has a brand name Australians recognise and isn't airing mind-numbing shows like The Shire anymore. In March this year, Hamish McLennan stepped into the company's top position and former Seven Network executive director Peter Meakin has also joined team Ten. They have made it their mission to revitalise the network. Ten's share price has taken a beating but is still hanging on. Perhaps it's time for a bargain?
Source: Google Finance
Foolish takeaway
These three companies have performed very differently over the last year but are all appealing in their own way. The top stocks on S&P/ASX 200 (ASX: XJO) (^AXJO) remain overvalued and more investors are realising the potential outside the index. Perhaps you can t0o.
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Motley Fool contributor Owen Raszkiewicz owns shares in IMF Australia.
