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November, 2010


Small-capitalization stocks with low debt (D/E), real profits or return on equity (ROE), and low price for their earnings (P/E) can be precious to an investment portfolio. When some of them also have significant dividends, a handful of such gems may help build one's fortune.

Recent fears of indebted European nations, of China's measures to fight inflation, or of added foreclosure woes among both ordinary homeowners and our nations' banks, plus uncertainty about what Washington politicians may next have up their sleeves to "fix" the economy, have caused a several percentage point decline in U.S. stock markets since the big switch election earlier this month. That this may actually be a good thing, since stocks were again getting into rarified, overbought territory, too high to be justified by their projected income streams, has been largely ignored.

Yet, this Thanksgiving season, let us be appreciative of market volatility, for just as oceans going out may reveal tasty morsels stranded in the tide pools, so the lower average share prices from recent downturns make it easier to find juicy bargains.

Here, for instance, are five companies with the characteristics described above and, in my opinion, worthy of greater attention.

Air T, Inc.AIRT$23.0 mill.3.5%$9.4612.6%8.80.00
Collectors Universe, Inc.CLCT$109.6 mill.9.2%$14.3664.2%6.60.00
Jiangbo Pharmaceuticals, Inc.JGBO$89.5 mill.0.0%$7.0823.1%5.20.19
Teredyne, Inc.TER$2.0 bill.0.0%$11.3039.8%7.30.14
Tianyin Pharmaceutical Co., Inc.TPI$83.7 mill.3.2%$2.9922.5%6.80.02

Please do not take my word for it. Instead, do your own homework and/or check with a trusted financial consultant. We shall be loading up on some of these, though, and think that, as a group, their shares' yield and earnings merit substantially higher prices than they are asking today.


Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)

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