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Friday, February 11, 2022
3 Willie Keeler Inspired European Stocks That Can Earn You 666% or Higher in Returns
Hall of Fame baseball player Willie Keeler’s profound success as a hitter lay in his motto: “Keep your eye on the ball, and hit ‘em where they ain’t.”
Questionable grammar aside, Keeler’s motto offers sound advice that, if heeded, can be translated into tremendous investment success for retail, aka smaller, investors.
Every investor is focused on earning profits, but unfortunately most are looking in the same places and listening to the same noises. ‘Hitting ‘em where they ain’t’ means looking in places that most people won’t be looking. This is how you find incredible value and reap astronomical market returns.
At Taryag Financial, we help investors find incredible value by implementing our own version of “hit ‘em where they ain’t”, or more precisely “look where they ain’t”. Our process, while incredibly successful, is also quite time intensive. Therefore, we’re going to show you a simplified process, in order to save you time while still netting you some incredible results that most investors won’t get.
Let’s get started and have some fun. The first step is to screen for successful companies, using meaningful screening criteria. While there are dozens of useful indicators, we find the current ratio and the return on capital (ROC) to be two of the most meaningful.
We believe that a current ratio of more than 1, and return on capital (ROC), also known as (ROIC) of greater than 20% should be considered prerequisites prior to considering an investment in most companies. The ROC, or ROIC, indicates how well a company can turn its capital into profits. The higher this number, the more effective the company is at running its business and subsequently creating profit.
A company’s current ratio is its current assets divided by its current liabilities and measures its ability to pay its obligations in the next year. The higher that this number is indicates that the company has a greater ability to pay off its short term obligations and keep the business running.
We further narrowed our focus to limit our search to European* small cap and mid cap companies with a high ROC% and high current ratio, before eventually narrowing our list to 10 final prospects.
We analyzed our prospect list by poring over numerous financial reports and other relevant data points, researching board members, reviewing industry trends, and more. We were able to pare that down to a final list of three companies that could earn you profits of more than 600% in the next 3-5 years.
So, without much further ado, cue drumroll:
#1: Ege Seramik Sanayi ve Ticaret A.S. (EGSER.IS)-Turkey
Market Capitalization: 1.198B
Price per Share: 16.35 TRY / 1.06 Euro / 1.21 USD
What they do: EGSER produces wall and floor tiles.
Why we like them: EGSER has displayed a commitment to being environmentally friendly, as well as being customer obsessed (which sounds very similar to Amazon, and look how they’re turning out). The current exchange rate between the Turkish lira and Western currencies make for a great entry price, especially for a company with 50% quarterly revenue growth.
Potential red flag(s): EGSER’s profitability is connected to energy costs, which have risen significantly in recent months. Many energy experts expect energy costs to remain high in the short term. While the new Nord Stream 2 pipeline from Russia to Germany should lower heating costs in the long run, a Russian invasion of Ukraine would almost certainly shutter that project in the short term and arguably fuel investor concern and skittishness about the long term prospects of EGSER.
#2: Public Joint Stock Company Magnitogorsk Iron & Steel Works (MHQ.F)-Russia
Market Capitalization: 8.438B
9.80 Euro / 11.16 USD
What they do: MHQ produces steel products.
Why we like them: MHQ expresses concern for the environment and sustainable practices. Backing up those words will increase their favor among investors who view environmental friendliness as a key investing value. Despite slightly decreasing profits over the last year, MHQ has increased its dividend distributions to shareholders.
Potential red flag(s): As a Russian company, MHQ faces incredible uncertainty regarding a potential Russian invasion of Ukraine. The fallout of such an invasion, which could include Russia being kicked out of SWIFT, would likely prove disastrous to the Russian economy in general, and MHQ specifically.
#3: SAF Tehnika A/S (VTZ.F) (Latvia)
Market Capitalization: 41.844M
13.25 Euro / 15.10 USD
What they do: VTZ manufactures point to point microwave data transmission equipment.
Why we like them: VTZ is incredibly innovative as their Aranet line of products highlights. Despite being headquartered in tiny Latvia, their products are distributed in more than 130 countries. Their small size will allow them to remain innovative and flexible, and their expansive reach ensures that they have markets for their products in order to become even more profitable.
Potential red flag(s): Many analysts would point to the incredibly low trading volume (90 as of 8:07 CET today) for VTZ as a potential red flag. In this case, we don’t view it in this manner. Small cap stocks, or nano cap in the case of VTZ, are naturally going to trade in lower volumes.
The overwhelming majority of investors, large and small alike, are not even considering, or researching potential investments in these smaller companies.
Since most investors neglect smaller companies, due diligence on your part during the research process can help you find overlooked stocks that can earn you profits of more than 6 times your original investment. All you need to do is to heed the advice that Willie Keeler would give:
Look where they ain’t.
To partner with us, or to reach out with comments, questions, or concerns, please email us at info@taryagfinancial.com.
*(Note: For investors outside of these countries, you will likely need a brokerage with exposure to international markets, such as Interactive Brokers, to be able to purchase these stocks.)
(Above image courtesy of Danielle Rice)
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