It’s good to look at stocks that not everyone else is looking at. A little neglect can be a good thing.
Companies that are a little illiquid.
Companies with a dedicated shareholder base; they don’t sell at the drop of a hat.
Companies with control investors that don’t give outside passive minority investors the short end of the stick.
Companies that have odd business models that have most investors ignore them
Companies in boring businesses.
Let’s look at this top down, looking at neglect by market sector. Days to turn over indicates how rapidly stocks are traded. A high number means they trade more slowly.
Sector
Market Cap ($M)
Dollar Volume ($K)
Days to turn over
05 – Consumer Non-Cyclical
1,536,807
7,274,592
211
07 – Financial
3,511,041
16,767,713
209
12 – Utilities
1,051,811
5,348,267
197
06 – Energy
2,425,787
14,781,550
164
02 – Capital Goods
1,253,361
7,882,012
159
08 – Health Care
2,428,969
16,080,916
151
Grand Total
23,817,027
161,861,109
147
01 – Basic Materials
947,830
6,770,631
140
11 – Transportation
594,989
4,279,380
139
03 – Conglomerates
15,805
116,462
136
09 – Services
4,936,835
37,308,869
132
10 – Technology
4,368,575
38,382,921
114
04 – Consumer Cyclical
745,217
6,867,798
109
In general, colder sectors attract more long-term holders. Sectors where competitive conditions change more rapidly turn over faster.
An aside before we go on — I excluded from this analysis:
Foreign stocks trading on US exchanges
Over the counter stocks
Stocks with less than $10 million in market cap
Exchange traded products
That left me with around 3900 stocks. As an aside, stock turnover seems have to increased, and I wonder if high frequency trading and ETP creation/liquidation might be driving that. 147 days for an average holding period means stocks trade their entire market capitalization around 2.5x per year. Cue up the commentary from Buffett and Munger about how most trading in the stock market is wasted effort.
But now let’s look at industries:
Industry
Market Cap ($M)
Dollar Volume ($K)
Days to turn over
0715 – Insurance (Property & Casualty)
632,449
1,730,968
365
0112 – Fabricated Plastic & Rubber
3,298
10,484
315
1206 – Natural Gas Utilities
435,106
1,407,846
309
0506 – Beverages (Non-Alcoholic)
354,710
1,217,841
291
1103 – Air Courier
139,858
505,601
277
0521 – Personal & Household Products
434,008
1,574,389
276
1209 – Water Utilities
17,103
64,198
266
0724 – Money Center Banks
223,336
877,033
255
0524 – Tobacco
272,385
1,170,334
233
0606 – Oil & Gas – Integrated
438,181
1,900,557
231
0957 – Retail (Grocery)
398,981
1,740,963
229
0712 – Insurance (Miscellaneous)
51,749
227,575
227
0218 – Misc. Capital Goods
417,891
1,859,649
225
0975 – Waste Management Services
59,927
283,562
211
0730 – S&Ls/Savings Banks
1,887
9,013
209
1112 – Railroads
186,397
902,219
207
0809 – Major Drugs
227,419
1,135,147
200
0915 – Communications Services
692,373
3,519,894
197
0503 – Beverages (Alcoholic)
52,692
273,645
193
0727 – Regional Banks
1,227,813
6,422,106
191
1030 – Scientific & Technical Instruments
265,595
1,393,898
191
0706 – Insurance (Accident & Health)
247,622
1,310,785
189
0718 – Investment Services
554,225
2,934,362
189
0418 – Footwear
80,706
428,470
188
0512 – Fish/Livestock
1,917
10,383
185
0703 – Consumer Financial Services
405,697
2,203,610
184
0203 – Aerospace and Defense
402,223
2,254,100
178
0960 – Retail (Home Improvement)
169,283
956,876
177
0127 – Misc. Fabricated Products
77,222
439,594
176
0221 – Mobile Homes & RVs
5,297
31,414
169
0612 – Oil Well Services & Equipment
574,292
3,407,144
169
0106 – Chemicals – Plastics and Rubbers
173,053
1,038,370
167
0954 – Retail (Drugs)
230,495
1,417,370
163
1109 – Misc. Transportation
73,963
456,181
162
0103 – Chemical Manufacturing
353,360
2,227,847
159
0709 – Insurance (Life)
166,263
1,052,261
158
0803 – Biotechnology & Drugs
1,613,675
10,424,895
155
1203 – Electric Utilities
599,603
3,876,223
155
0415 – Auto & Truck Parts
203,596
1,324,773
154
0509 – Crops
4,889
31,874
153
0918 – Hotels & Motels
94,044
616,953
152
0609 – Oil & Gas Operations
1,386,175
9,141,482
152
0209 – Construction – Supplies and Fixtures
140,270
934,529
150
1006 – Computer Hardware
72,374
487,123
149
1036 – Software & Programming
1,152,944
7,816,781
147
Grand Total
23,817,027
161,861,109
147
0921 – Motion Pictures
159,568
1,105,864
144
1024 – Electronic Instruments & Controls
182,569
1,279,912
143
0515 – Food Processing
403,598
2,854,143
141
0909 – Business Services
446,084
3,157,933
141
0812 – Medical Equipment & Supplies
436,733
3,130,033
140
0930 – Printing Services
7,170
51,557
139
0109 – Containters & Packaging
81,869
590,633
139
0933 – Real Estate Operations
594,286
4,295,888
138
0206 – Construction & Agricultural Machinery
137,131
991,809
138
0303 – Conglomerates
15,805
116,462
136
0969 – Schools
21,108
160,274
132
1115 – Trucking
44,104
336,398
131
0939 – Rental & Leasing
238,564
1,828,936
130
0130 – Non-Metallic Mining
4,789
37,031
129
0942 – Restaurants
219,661
1,709,208
129
1118 – Water Transportation
32,241
255,920
126
0406 – Appliances & Tools
55,182
456,389
121
0927 – Printing & Publishing
91,943
760,613
121
0133 – Paper & Paper Products
30,855
256,597
120
0936 – Recreational Activities
75,698
643,463
118
0124 – Metal Mining
98,839
864,894
114
0430 – Recreational Products
54,015
474,019
114
0421 – Furniture & Fixtures
31,741
279,508
114
0948 – Retail (Catalog & Mail Order)
266,904
2,421,091
110
0806 – Healthcare Facilities
151,142
1,390,841
109
0121 – Iron & Steel
76,186
704,432
108
0924 – Personal Services
41,546
386,447
108
0403 – Apparel/Accessories
89,378
848,477
105
1018 – Computer Services
1,023,238
9,989,880
102
1003 – Communications Equipment
837,801
8,227,385
102
0972 – Security Systems & Services
8,892
88,979
100
1021 – Computer Storage Devices
124,136
1,290,696
96
0963 – Retail (Specialty Non-Apparel)
216,223
2,271,386
95
0945 – Retail (Apparel)
160,390
1,696,879
95
0906 – Broadcasting & Cable TV
471,387
5,029,758
94
0433 – Textiles – Non-Apparel
11,455
123,789
93
1033 – Semiconductors
670,980
7,309,563
92
0951 – Retail (Department & Discount)
102,849
1,133,640
91
1012 – Computer Networks
14,378
159,288
90
0903 – Advertising
39,473
442,180
89
0409 – Audio & Video Equipment
11,660
130,676
89
0518 – Office Supplies
12,608
141,981
89
0215 – Construction Services
119,782
1,361,922
88
0912 – Casinos & Gaming
109,703
1,259,520
87
0424 – Jewelry & Silverware
6,527
78,568
83
0603 – Coal
27,139
332,366
82
0118 – Gold & Silver
20,871
256,842
81
0115 – Forestry & Wood Products
27,489
343,907
80
1027 – Office Equipment
4,010
51,064
79
0412 – Auto & Truck Manufacturers
189,092
2,548,454
74
0436 – Tires
8,943
126,838
71
0212 – Construction – Raw Materials
30,768
448,589
69
1106 – Airline
118,426
1,823,061
65
0966 – Retail (Technology)
20,283
329,637
62
0427 – Photography
2,923
47,837
61
1015 – Computer Peripherals
20,549
377,330
54
Again, the pattern is more volatile and controversial industries trade more frequently than the more stable industries. One one sense, this is obvious, because the stock market can be used for two purposes — investing and gambling. Gambling is much more attractive when prices are volatile, and the prospects for making a big win are significant. (Even if the possibility of big losses is high as well. Oh well, profits tend to flow to those who eliminate the downside.)
Finally, let’s look at individual stocks, segmented by market capitalization.
Behemoth Stocks
Company
Ticker
Sector
Industry
Days
Berkshire Hathaway Inc.
BRK.A
07 – Financial
0715 – Insurance (Property & Casualty)
6,579
Wal-Mart Stores, Inc.
WMT
09 – Services
0957 – Retail (Grocery)
542
Exxon Mobil Corporation
XOM
06 – Energy
0609 – Oil & Gas Operations
453
Johnson & Johnson
JNJ
08 – Health Care
0803 – Biotechnology & Drugs
427
PepsiCo, Inc.
PEP
05 – Consumer Non-Cyclical
0506 – Beverages (Non-Alcoholic)
365
Procter & Gamble Company, The
PG
05 – Consumer Non-Cyclical
0521 – Personal & Household Products
362
General Electric Company
GE
02 – Capital Goods
0218 – Misc. Capital Goods
353
Wells Fargo & Co
WFC
07 – Financial
0727 – Regional Banks
345
Coca-Cola Company, The
KO
05 – Consumer Non-Cyclical
0506 – Beverages (Non-Alcoholic)
341
Chevron Corporation
CVX
06 – Energy
0606 – Oil & Gas – Integrated
339
Comcast Corporation
CMCSA
09 – Services
0915 – Communications Services
196
QUALCOMM, Inc.
QCOM
10 – Technology
1033 – Semiconductors
193
Citigroup Inc
C
07 – Financial
0727 – Regional Banks
175
Cisco Systems, Inc.
CSCO
10 – Technology
1003 – Communications Equipment
161
Intel Corporation
INTC
10 – Technology
1033 – Semiconductors
146
Bank of America Corp
BAC
07 – Financial
0727 – Regional Banks
138
Gilead Sciences, Inc.
GILD
08 – Health Care
0803 – Biotechnology & Drugs
123
Amazon.com, Inc.
AMZN
09 – Services
0948 – Retail (Catalog & Mail Order)
105
Apple Inc.
AAPL
10 – Technology
1003 – Communications Equipment
93
Facebook Inc
FB
10 – Technology
1018 – Computer Services
50
The table above lists the biggest stocks — the top ten that are less traded, and the top ten that are most traded. No surprises, those that are most traded are more controversial than those that are traded less. Also, some companies have investors with control positions, which further slows down trading as most control investors rarely trade.
Large Cap Stocks
Company
Ticker
Sector
Industry
Days
Cheniere Energy Partners LP Ho
CQH
12 – Utilities
1206 – Natural Gas Utilities
1,709
CNA Financial Corp
CNA
07 – Financial
0715 – Insurance (Property & Casualty)
1,647
Icahn Enterprises LP
IEP
09 – Services
0963 – Retail (Specialty Non-Apparel)
1,355
Spectra Energy Partners, LP
SEP
12 – Utilities
1206 – Natural Gas Utilities
1,190
Enable Midstream Partners LP
ENBL
06 – Energy
0606 – Oil & Gas – Integrated
1,166
Cheniere Energy Partners LP
CQP
12 – Utilities
1206 – Natural Gas Utilities
1,041
Thomson Reuters Corporation (U
TRI
09 – Services
0927 – Printing & Publishing
1,012
Western Gas Equity Partners LP
WGP
06 – Energy
0609 – Oil & Gas Operations
969
Enterprise Products Partners L
EPD
12 – Utilities
1206 – Natural Gas Utilities
956
Plains GP Holdings LP
PAGP
06 – Energy
0612 – Oil Well Services & Equipment
953
Citrix Systems, Inc.
CTXS
10 – Technology
1036 – Software & Programming
54
United Continental Holdings In
UAL
11 – Transportation
1106 – Airline
53
LinkedIn Corp
LNKD
10 – Technology
1018 – Computer Services
47
Yahoo! Inc.
YHOO
10 – Technology
1018 – Computer Services
47
Whole Foods Market, Inc.
WFM
09 – Services
0957 – Retail (Grocery)
45
Micron Technology, Inc.
MU
10 – Technology
1033 – Semiconductors
39
CBS Corporation
CBS
09 – Services
0906 – Broadcasting & Cable TV
37
Tesla Motors Inc
TSLA
04 – Consumer Cyclical
0412 – Auto & Truck Manufacturers
21
Netflix, Inc.
NFLX
09 – Services
0906 – Broadcasting & Cable TV
19
Twitter Inc
TWTR
10 – Technology
1018 – Computer Services
19
What fascinates me here about the low turnover stocks is the dominance of energy limited partnerships. Since they are income vehicles, they don’t trade as much stocks used for speculative gains.
Mid-cap Stocks
Company
Ticker
Sector
Industry
Days
CIM Commercial Trust Corp
CMCT
09 – Services
0939 – Rental & Leasing
9,382
Crown Media Holdings, Inc
CRWN
09 – Services
0906 – Broadcasting & Cable TV
4,333
Clear Channel Outdoor Holdings
CCO
09 – Services
0903 – Advertising
2,258
American National Insurance Co
ANAT
07 – Financial
0715 – Insurance (Property & Casualty)
1,756
Gamco Investors Inc
GBL
07 – Financial
0718 – Investment Services
1,627
Valhi, Inc.
VHI
01 – Basic Materials
0103 – Chemical Manufacturing
1,385
OCI Partners LP
OCIP
01 – Basic Materials
0103 – Chemical Manufacturing
1,205
Summit Midstream Partners LP
SMLP
12 – Utilities
1206 – Natural Gas Utilities
1,199
TFS Financial Corporation
TFSL
07 – Financial
0727 – Regional Banks
1,193
Global Partners LP
GLP
06 – Energy
0609 – Oil & Gas Operations
1,131
FireEye Inc
FEYE
10 – Technology
1036 – Software & Programming
21
AK Steel Holding Corporation
AKS
01 – Basic Materials
0121 – Iron & Steel
21
Ariad Pharmaceuticals, Inc.
ARIA
08 – Health Care
0803 – Biotechnology & Drugs
21
Zillow Inc
Z
09 – Services
0933 – Real Estate Operations
20
Trulia Inc
TRLA
09 – Services
0909 – Business Services
20
Sunedison Inc
SUNE
10 – Technology
1033 – Semiconductors
19
J C Penney Company Inc
JCP
09 – Services
0951 – Retail (Department & Discount)
17
SolarCity Corp
SCTY
10 – Technology
1033 – Semiconductors
17
GT Advanced Technologies Inc
GTAT
10 – Technology
1033 – Semiconductors
15
Yelp Inc
YELP
09 – Services
0927 – Printing & Publishing
12
Again. hot stocks with uncertain returns at the bottom, and stocks with more certain prospects at the top. Note the income vehicles in the less traded stocks.
Small Cap Stocks
Company
Ticker
Sector
Industry
Days
PHI Inc.
PHII
06 – Energy
0612 – Oil Well Services & Equipment
13,434
First Mid-Illinois Bancshares,
FMBH
07 – Financial
0727 – Regional Banks
10,674
QAD Inc.
QADB
10 – Technology
1036 – Software & Programming
8,529
Intermountain Community Bancor
IMCB
07 – Financial
0727 – Regional Banks
8,374
Greene County Bancorp
GCBC
07 – Financial
0727 – Regional Banks
7,021
Oconee Federal Financial
OFED
07 – Financial
0727 – Regional Banks
6,143
Bel Fuse, Inc.
BELFA
10 – Technology
1024 – Electronic Instruments & Controls
5,131
PrimeEnergy Corporation
PNRG
06 – Energy
0609 – Oil & Gas Operations
4,303
Community Financial Corp
TCFC
07 – Financial
0727 – Regional Banks
3,608
Transcontinental Realty Invest
TCI
09 – Services
0933 – Real Estate Operations
3,168
PowerSecure International, Inc
POWR
12 – Utilities
1203 – Electric Utilities
20
Penn Virginia Corporation
PVA
06 – Energy
0609 – Oil & Gas Operations
20
Pixelworks, Inc.
PXLW
10 – Technology
1033 – Semiconductors
20
IsoRay, Inc.
ISR
08 – Health Care
0812 – Medical Equipment & Supplies
18
Quantum Fuel Systems Tech Worl
QTWW
04 – Consumer Cyclical
0415 – Auto & Truck Parts
17
Pacific Ethanol Inc
PEIX
01 – Basic Materials
0103 – Chemical Manufacturing
17
Glu Mobile Inc.
GLUU
10 – Technology
1036 – Software & Programming
15
Achillion Pharmaceuticals, Inc
ACHN
08 – Health Care
0809 – Major Drugs
14
Walter Energy, Inc.
WLT
06 – Energy
0603 – Coal
14
Plug Power Inc
PLUG
10 – Technology
1024 – Electronic Instruments & Controls
8
Look at all of the regional banks amid those that turn over less. Look at all of the controversial stocks amid those that trade frequently.
Microcap Stocks
Company
Ticker
Sector
Industry
Days
Bridgford Foods Corporation
BRID
05 – Consumer Non-Cyclical
0515 – Food Processing
20,286
Magyar Bancorp, Inc.
MGYR
07 – Financial
0727 – Regional Banks
8,948
Bowl America Incorporated
BWL.A
09 – Services
0936 – Recreational Activities
8,599
MSB Financial Corp.
MSBF
07 – Financial
0727 – Regional Banks
5,562
Siebert Financial Corp.
SIEB
07 – Financial
0718 – Investment Services
5,136
Pathfinder Bancorp, Inc.
PBHC
07 – Financial
0727 – Regional Banks
4,764
Jacksonville Bancorp Inc
JXSB
07 – Financial
0727 – Regional Banks
4,567
Oak Valley Bancorp(NDA)
OVLY
07 – Financial
0727 – Regional Banks
4,363
Howard Bancorp Inc
HBMD
07 – Financial
0727 – Regional Banks
4,308
Bay Bancorp Inc
BYBK
07 – Financial
0727 – Regional Banks
4,240
Hyperdynamics Corporation
HDY
06 – Energy
0609 – Oil & Gas Operations
16
InterCloud Systems Inc
ICLD
09 – Services
0909 – Business Services
14
BioFuel Energy Corp.
BIOF
01 – Basic Materials
0103 – Chemical Manufacturing
10
India Globalization Capital, I
IGC
02 – Capital Goods
0215 – Construction Services
8
LiveDeal Inc
LIVE
10 – Technology
1018 – Computer Services
8
Giga-tronics, Incorporated
GIGA
10 – Technology
1024 – Electronic Instruments & Controls
7
Digital Ally, Inc.
DGLY
04 – Consumer Cyclical
0409 – Audio & Video Equipment
5
DARA Biosciences Inc
DARA
08 – Health Care
0803 – Biotechnology & Drugs
4
Spherix Inc
SPEX
09 – Services
0909 – Business Services
4
USEC Inc.
USU
12 – Utilities
1203 – Electric Utilities
3
Look at all of the bitty banks that don’t get traded. Perfect for some of my friends who buy and hold such banks, if they can get the trade on. And then, look at all of the controversial companies whose stocks trade trade like a spinning top.
I encourage all of my readers to analyze situations where there are fewer eyeballs looking. Analyze situations where control investors limit the trading relative to the size of the firm. Go where others don’t go, because it is dull. Look for advantage where few others do. And after that, be willing to hold for a while — years, not months. Pay attention as to whether the company has a defensible business model — strong balance sheet, moat versus competition, etc. Then look for a reasonable to low price. There is the making of a good investment.
Full disclosure: long CVX & BRK/B