I Like These Stocks

Well, I like that we all have a chance to make (or lose) money investing in public companies, though I am quite pessimistic on the stock market currently as I have conveyed. Stocks are doing very well as measured by the indexes. Here are three that I follow closely:

These are large ETFs that trade very frequently and that represent the S&P 500, the NASDAQ 100 and the Russell 2000. This is just the action in 2024. If one looks back just a bit further to the bottom of the bear market after the pandemic hit in March 2020, a little bit less than 5 years ago, these are all up a ton. Here are the slightly lower returns over the past five years:

This past week, the S&P 500 and the Russell 2000 fell, but the NASDAQ 100 actually rose just a bit. It did not make a new all-time high. I am not going to share again the reasons I am bearish, but rates are rising, as I predicted, and we have a Presidential election in a little over a week.

So, stocks are up a lot, but I am aware of many that are down a lot too. In this piece, I discuss ten stocks that look attractive to me currently. I own only one myself, BARK Inc. (BARK), which is a new addition to my watchlist that I just added to my IRAs last week. Here the ten interesting stocks are, presented in alphabetical order by stock symbol.

BARK Inc. (BARK)

I was unaware of this company until I saw an article about it on Seeking Alpha. The company runs a dog-focused website for subscribers to toys, accessories and other consumables, and it also sells some products to places like Target and Amazon.

What caught my attention is that the stock is a busted SPAC. It went public in late 2020 by merging with a Special Purpose Acquisition Company, Northern Star Acquisition Corp, that had sold stock at $10. Now, it trades at $1.34. These SPACs were very popular, but now they seem to be despised.

The market cap is just $229 million, and the company has net cash of $31 million. The stock trades at 1.8X tangible book value. The enterprise value to adjusted EBITDA seems high at 29X for FY2025, which ends in March, but the company is growing adjusted EBITDA substantially. The EV compared to projected adjusted EBITDA for FY26 is 14.6X. I have heard of Chewy (CHWY), which is kind of a peer but much larger, and it trades at 19.1X projected adjusted EBITDA for its fiscal year ending March 2026.

Looking at the BARK chart, the all-time low was set last December and smells of tax-loss selling. The stock traded as low as $0.70. So, it is up almost 100% since the low. The recent peak was $1.91, and the stock left a gap this week above the current price.

Franklin Resources (BEN)

I have been following this one a while and know the company from years of watching it. I have owned this stock recently, but I have no position in this money manager that runs Franklin Templeton, which merged with Putnam earlier this year. I like T Rowe Price (TROW) as a company more (better balance sheet, good company, less bond-focused), but BEN has trailed TROW badly recently. Part of the problem for BEN has been an SEC investigation of its unit Western Asset Management.

The stock, down 31.6% year-to-date, trades at at PE of just 8.5X for 2024. It is also down 26.8% over the past five years, though above the 2020 lows.

Big Five Sporting Goods (BGFV)

I wrote here in March about this one, saying that it might be a buy, and the stock was at $3.60. Now Big Five Sporting Goods is down almost 50% at $1.87. The company had just cut its dividend and was trading at 34% of its tangible book value at that time. It has bounced from a5-year low of $1.45 in August and now trades at 19% of tangible book value. The company is burning cash and has negative adjusted EBITDA as revenue declines. There are no analysts covering it. It is run by Steve Miller, but he is not the rock star. Rather, he is the son of one of the co-founders. He owns about 900K shares, which is not that much. This seems risky, but very cheap. They report their Q3 this week.

British American Tobacco (BTI)

I am not a fan of cigarettes at all, and this company is definitely involved in them. I have followed Atria (MO) for a while, and I am aware of these companies because of their investments into Canadian Licensed Producers of cannabis. Both stocks have been terrible over the past decade, with BTI losing 37%. It is up 17.7% (before the dividend) in 2024. I have owned this in the past despite the slow business growth and large amount of debt. There was a gap up in trading in August, with the gap still open at $33.5, which is just 2.6% below the current price. I might buy in the mid 33s. The stock currently trade at a PE for 2024 of just 7.4X. The dividend yield is 8.8%.

Intel (INTC)

I don't like large companies or technology stocks much now, but I do like this one. Despite the big run-up this year in large technology stocks, Intel is down 55%, and it has dropped 60% over the past five years. The company suspended its dividend, and may be removed from the Dow Jones Industrial Average. There are a lot of challenges, but one has been that it hasn't taken on artificial intelligence opportunities well. EPS are plunging in 2024 but expected to recover to 2023 levels next year. The stock trades at a 2025 PE of 19.7X. The stock trades at just 1.4X tangible book value. The company may be splitting into two companies: a design firm and a manufacturer for others.

LKQ Corp (LKQ)

This is a company that I have followed for a long time that works to provide replacement car parts through salvage and recycling. The stock is down 21.4% year-to-date and is up just 18% over the past five years. My wife does own some, and I am thinking about adding some. It reported this past week an announced a boosted potential share repurchase plan. I don't care for the balance sheet, which has over $5 billion in debt, and it is not the potential share repurchases that excite me. I like the idea of a good company that is out of favor. The stock trades at just 8.5X EV to projected adjusted EBITDA for 2024. The PE for 2024 is just 10.5X.

PBF Energy (PBF)

I have been following this one for just a short period of time and have owned it and sold it a few times. The company owns refining facilities in several states. I generally don't like these companies, but this one stands out to me due to its not-so-bad balance sheet and the fact that it trades well below tangible book value at just 0.6X. Revenue spiked in 2022 but has been declining since then. EPS are projected to be negative this year, but the 2025 projected EPS are recovering to $0.71, which yields a PE of 45X. I think looking at adjusted EBITDA is helpful here, and for 2024, it is projected to fall 85% before doubling in 2025. The stock currently trades at just 6X projected adjusted EBITDA for 2025. The dividend yield is 3%. Carlos Slim owns a lot of shares and has been increasing his position.

Pfizer (PFE)

Pfizer got boosted by COVID, but it has been in decline since the end of 2021, losing over half its value. In 2024, the stock has declined 21.4%. It trades near its pandemic low, and it has gained only 3% over the past 10 years (before dividends).

The stock seems cheap to me, though it isn't growing rapidly. It trades at a PE of 10.8X for 2024 and just 10X for 2025. Enterprise value to projected adjusted EBITDA for 2024 is 9.3X. The dividend yield is quite high at 5.8%. My wife owns this one too.

Sirius XM Radio (SIRI)

I am a big user of this one. We pay for it in Fran's car, and I listen to it regularly on my computer in my office. I loaded up in my IRA recently near the all-time low and exited with a profit, but I have my eye on it because it is so cheap. Even Berkshire Hathaway thinks so! An old colleague of mine who I have followed for many years, Andrew Bary, wrote about it positively at Barron's recently. Note that the stock did a reverse-split. It has a big dividend but has substantial debt. The enterprise value to projected adjusted EBITDA for 2024 is just 3.8X.

TrueBlue (TBI)

I like the symbol, as I recovered from traumatic brain injury (TBI)! The staffing company is run by CEO Taryn Owen, who joined the company in 2010 (initially at unit PeopleScout). She became CEO in September 2023. The company was formed in 1989 as Labor Ready and went public in 1996. It became TrueBlue in 2008. In 2023, it helped 464K people find work serving 67K clients.

The stock has dropped 53% in 2024 so far, and it is down 70% over the past decade. I like the valuation more than I like the ticker, as the stock trades well below tangible book value at just 0.7X. Revenue has been declining, and adjusted EBITDA has fallen substantially. Analysts project it will rebound in 2025 from $1 million to $19 million, still well below where it was just a few years ago. The company has net cash, though it has had negative operating cash flow so far this year. I like the stock right here!

Insiders don't own too much, though management does have nice incentive payouts if the company is acquired and they are terminated. BlackRock owns 17% of the company, and Pzena owns another 10%. Perhaps they will push for an acquisition.

So, while I really don't like the levels currently for a lot of stocks, here are 10 that interest me. They are all over the place in market cap and in industry. For those looking for other ideas about how to invest right now, I did explain recently my interest in Treasury Inflation-Protected Securities (TIPS), which I have a major stake that I recently acquired. I have been loud and clear about my nervousness for large-cap stocks, especially technology stocks, and I did very recently discuss my concern with large financials.