2014-08-01

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

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