Good Over-the-Counter “Pink” Stocks, besides ADRs by David Merkel, CFA of Aleph Blog

I really appreciate my readers.  Here’s an e-mail from one:

David,

Just read your recent blog post “E-mails on Insurance.”

You made the comment that “aside from non-sponsored ADRs no good companies trade on the pink sheets.”

Of course that is true in a general sense. I also am sure you have been inundated with lots of email taking exception to that comment.

One company I have loosely followed over time (that I came across just by chance many years ago) is Computer Services (CSVI) [www.csiweb.com]. There is no volume in the stock so institutional managers have no ability to take a position, but the firm has done a great job of growing the business while maintaining profitability (been an opportunistic acquirer of small bank processor companies) and is probably a candidate for consolidation by a Fiserv or someone like that. Anyhow, I think if you take a look at the firm, you will see that there is at least one solid company traded on the pinks (and I am sure there are others, I just don’t go fishing there).

My comment “aside from non-sponsored ADRs no good companies trade on the pink sheets.” is an overstatement.  To prove that, I give you a list of 148 companies that:

penny-stocks ADRs

  • Have been profitable for the last four fiscal years.
  • Are US companies
  • Are not ADRs

2370 companies that trade over-the-counter reduce to 148 companies — 6.24% of the whole, explaining why my overstatement is largely, but not totally correct.  I would not tell someone to look amid these companies to find good ones, but there are some good ones there.  I have listed them in declining order of market capitalization.

Company Ticker Sector Industry Mkt Cap Dollar Volume P/E P/B P/S
Belk Inc BLKIA 09 – Services 0951 – Retail (Department & Discount)    2,057.80             –    12.40      1.66      0.51
First National Bank Alaska FBAK 07 – Financial 0727 – Regional Banks       604.00             –    14.90      1.23      5.45
First Citizens Bancorporation, FCBN 07 – Financial 0727 – Regional Banks       572.70      33.20      9.60      0.64      1.87
Computer Services, Inc. CSVI 10 – Technology 1036 – Software & Programming       476.10    146.81    18.20      3.80      2.31
Hills Bancorporation HBIA 07 – Financial 0727 – Regional Banks       345.00        3.65    13.30      1.29      4.03
Farmers & Merchants Bancorp FMCB 07 – Financial 0727 – Regional Banks       324.40      20.85    13.60      1.54      4.27
FRMO Corp. FRMO 07 – Financial 0721 – Misc. Financial Services       302.80      23.45    26.90      3.66    16.64
HomeFed Corporation HOFD 02 – Capital Goods 0215 – Construction Services       299.80      22.83    62.40      1.79      7.93
First Opportunity Fund, Inc. FOFI 07 – Financial 0721 – Misc. Financial Services       262.10    269.95      7.20      0.86    58.25
International Wire Group Holdi ITWG 01 – Basic Materials 0127 – Misc. Fabricated Products       255.40        2.61    19.60      6.69      0.21
Canandaigua National Corporati CNND 07 – Financial 0724 – Money Center Banks       249.90        6.65    12.20      1.66      3.41
Viskase Companies, Inc. VKSC 01 – Basic Materials 0109 – Containters & Packaging       237.90    214.50    24.10      0.67
Conrad Industries, Inc. CNRD 11 – Transportation 1118 – Water Transportation       226.80    249.58      9.10      1.95      0.86
United Capital Corp. UCAP 10 – Technology 1024 – Electronic Instruments & Controls       187.40        4.80    13.40      1.34      1.58
Isabella Bank Corp ISBA 07 – Financial 0727 – Regional Banks       184.70      52.67    15.50      1.14      3.39
Profire Energy, Inc. PFIE 02 – Capital Goods 0209 – Construction – Supplies and Fixtures       160.20      98.83    41.90    10.81      5.97
Cambridge Bancorp CATC 07 – Financial 0727 – Regional Banks       150.50      59.33    11.50      1.47      3.20
Citizens Financial Services In CZFS 07 – Financial 0718 – Investment Services       148.30      24.55    10.90      1.64      4.06
Mestek, Inc. MCCK 02 – Capital Goods 0218 – Misc. Capital Goods       144.40        0.86      8.80      1.03      0.41
Webco Industries, Inc. WEBC 01 – Basic Materials 0127 – Misc. Fabricated Products       143.50      16.95    15.50      0.57      0.22
First Keystone Corp. FKYS 07 – Financial 0727 – Regional Banks       137.80      18.75    12.80      1.42      4.32
MVB Financial Corp MVBF 07 – Financial 0724 – Money Center Banks       135.30      14.40    22.10      1.67     

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