To shortlist potential candidates for my list of bargain stocks, I screened the market using the following criteria:
- Market cap below $1 billion
- YOY Revenue growth of more than 10%
- A strong buy rating from analysts
- Stock Price trades above $5.00 to limit volatility risks
- Price-to-Sales ratio below 2
Then, I sorted the list based on their price-to-sales ratio in descending order.
International General Insurance Holdings (IGIC)
International General Insurance Holdings (NASDAQ:IGIC) is a commercial insurance and reinsurance firm based in Jordan that holds a portfolio of assets globally for various assets in the energy, construction, ports and terminals, general aviation and other businesses. The company’s operations include:
- Specialty Long-tail: This is involved in casualty, financial, marine liability and inherent defects insurance line of business.
- Specialty Short-tail: This focuses on property, construction and engineering, energy, political violence, marine cargo, ports and terminals, contingency and general aviation business.
- Reinsurance: This focuses on its inward reinsurance treaty business.
The company has operations and offices worldwide, such as in London, Amman, Bermuda, Malta, Casablanca, Dubai and Kuala Lumpur.
International General Insurance Holdings reported a strong finish to 2023. Total revenue grew from $397.8 million in 2022 to $472 million, representing an 18.6% increase YOY. Net income also increased by 32.5% due to improved underwriting and investment income.
IGIC stock has a price-sales ratio of 1.38, which indicates that it is still trading at healthy levels relative to its revenue. Wall Street analysts also rate the stock a “strong buy.”
If you are looking for bargain stocks offering high growth potential at comfortable price levels, check out IGIC.
EZCORP (EZPW)
EZCORP (NASDAQ:EZPW) provides pawn transactions to U.S. and Latin American customers. The company operates in three main segments:
- U.S. Pawn: This focuses on U.S. operations under its EZPAWN, Value Pawn & Jewelry and pawn-related operations.
- Latin America Pawn: This facilitates operations in Latin America under its Empeno Facil, Cash Apoyo Efectivo, MaxiEfectivo and other pawn-related operations.
- Other Investments: This segment focuses on other investments in the business.
The company’s pawn stores also offer other services, such as cash advances against collateralized items and selling merchandise for value hunters.
In 2023, EZCORP’s revenue grew 18% YOY, while gross profits increased by 15%. Net income decreased by $11.7 million due to a one-time, non-cash goodwill impairment. Meanwhile, return on earning assets, a measure of how much income the company can generate with its assets, is at 161% for the full year.
Despite strong financials, the stock trades at a price-to-sales ratio of 0.83, a sign that investors still haven’t found this diamond in the rough, yet. Even Wall Street analysts see potential with their “strong buy” rating for EZPW stock.
Virco Manufacturing Corporation (VIRC)
The last on our list of bargain stocks is a designer and producer of furniture used in various settings. Virco Manufacturing Corporation (NASDAQ:VIRC) supplies offices, government facilities, schools and other establishments with various office furniture and products.
Some of its famous collections include the Sage Series and Metaphor series intended for school settings, the ZUMA series, and Analogy collections. Besides offices and facilities, Virco also supplies furniture to places of worship, hospitals and the government.
Virco is another stellar performer. FY 2023 ended with $269.1 million in revenue, 16.5% higher YOY. Full-year earnings also grew by 30%, from $1.03 to $1.34 per common share.
With an attractive price-to-sales ratio of 0.74 and a “strong buy” analyst rating, VIRC is a stock that investors looking to grow their portfolio should not miss out on.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.