Good Over-the-Counter “Pink” Stocks

I really appreciate my readers.  Here’s an e-mail from one:

David,

Just read your recent blog post “E-mails on Insurance.”

You made the comment that “aside from non-sponsored ADRs no good companies trade on the pink sheets.”

Of course that is true in a general sense. I also am sure you have been inundated with lots of email taking exception to that comment.

One company I have loosely followed over time (that I came across just by chance many years ago) is Computer Services (CSVI) [www.csiweb.com]. There is no volume in the stock so institutional managers have no ability to take a position, but the firm has done a great job of growing the business while maintaining profitability (been an opportunistic acquirer of small bank processor companies) and is probably a candidate for consolidation by a Fiserv or someone like that. Anyhow, I think if you take a look at the firm, you will see that there is at least one solid company traded on the pinks (and I am sure there are others, I just don’t go fishing there).

My comment “aside from non-sponsored ADRs no good companies trade on the pink sheets.” is an overstatement.  To prove that, I give you a list of 148 companies that:

  • Have been profitable for the last four fiscal years.
  • Are US companies
  • Are not ADRs

2370 companies that trade over-the-counter reduce to 148 companies — 6.24% of the whole, explaining why my overstatement is largely, but not totally correct.  I would not tell someone to look amid these companies to find good ones, but there are some good ones there.  I have listed them in declining order of market capitalization.

CompanyTickerSectorIndustryMkt CapDollar VolumeP/EP/BP/S
Belk IncBLKIA09 – Services0951 – Retail (Department & Discount)   2,057.80            –   12.40     1.66     0.51
First National Bank AlaskaFBAK07 – Financial0727 – Regional Banks      604.00            –   14.90     1.23     5.45
First Citizens Bancorporation,FCBN07 – Financial0727 – Regional Banks      572.70     33.20     9.60     0.64     1.87
Computer Services, Inc.CSVI10 – Technology1036 – Software & Programming      476.10   146.81   18.20     3.80     2.31
Hills BancorporationHBIA07 – Financial0727 – Regional Banks      345.00       3.65   13.30     1.29     4.03
Farmers & Merchants BancorpFMCB07 – Financial0727 – Regional Banks      324.40     20.85   13.60     1.54     4.27
FRMO Corp.FRMO07 – Financial0721 – Misc. Financial Services      302.80     23.45   26.90     3.66   16.64
HomeFed CorporationHOFD02 – Capital Goods0215 – Construction Services      299.80     22.83   62.40     1.79     7.93
First Opportunity Fund, Inc.FOFI07 – Financial0721 – Misc. Financial Services      262.10   269.95     7.20     0.86   58.25
International Wire Group HoldiITWG01 – Basic Materials0127 – Misc. Fabricated Products      255.40       2.61   19.60     6.69     0.21
Canandaigua National CorporatiCNND07 – Financial0724 – Money Center Banks      249.90       6.65   12.20     1.66     3.41
Viskase Companies, Inc.VKSC01 – Basic Materials0109 – Containters & Packaging      237.90   214.50   24.10     0.67
Conrad Industries, Inc.CNRD11 – Transportation1118 – Water Transportation      226.80   249.58     9.10     1.95     0.86
United Capital Corp.UCAP10 – Technology1024 – Electronic Instruments & Controls      187.40       4.80   13.40     1.34     1.58
Isabella Bank CorpISBA07 – Financial0727 – Regional Banks      184.70     52.67   15.50     1.14     3.39
Profire Energy, Inc.PFIE02 – Capital Goods0209 – Construction – Supplies and Fixtures      160.20     98.83   41.90   10.81     5.97
Cambridge BancorpCATC07 – Financial0727 – Regional Banks      150.50     59.33   11.50     1.47     3.20
Citizens Financial Services InCZFS07 – Financial0718 – Investment Services      148.30     24.55   10.90     1.64     4.06
Mestek, Inc.MCCK02 – Capital Goods0218 – Misc. Capital Goods      144.40       0.86     8.80     1.03     0.41
Webco Industries, Inc.WEBC01 – Basic Materials0127 – Misc. Fabricated Products      143.50     16.95   15.50     0.57     0.22
First Keystone Corp.FKYS07 – Financial0727 – Regional Banks      137.80     18.75   12.80     1.42     4.32
MVB Financial CorpMVBF07 – Financial0724 – Money Center Banks      135.30     14.40   22.10     1.67     5.34
First Mid-Illinois Bancshares,FMBH07 – Financial0727 – Regional Banks      130.30       4.40   12.90     1.32     2.43
First Real Estate Investment TFREVS09 – Services0933 – Real Estate Operations      126.70     13.69   42.40     7.73     3.08
First Manitowoc Bancorp, Inc.BFNC07 – Financial0730 – S&Ls/Savings Banks      120.80     33.30   11.30     1.19     3.07
Peoples Financial Services CorPFIS07 – Financial0727 – Regional Banks      120.40     62.40   14.60     1.90     4.37
First Farmers & Merchants CorpFFMH07 – Financial0727 – Regional Banks      111.20       3.30   13.30     1.05     3.05
Yasheng GroupHERB05 – Consumer Non-Cyclical0509 – Crops      105.50       3.88     0.80     0.05     0.11
Farmers & Merchants Bancorp InFMAO07 – Financial0727 – Regional Banks      105.10     62.01   11.40     0.98     3.37
Nova Lifestyle IncSTVS04 – Consumer Cyclical0421 – Furniture & Fixtures         89.20     93.77   16.80     2.50     1.17
Golden Growers CoopGGROU05 – Consumer Non-Cyclical0509 – Crops         89.10       1.44   18.50     2.30     0.93
First Guaranty Bancshares, IncFGBI07 – Financial0727 – Regional Banks         88.20       7.01   10.50     1.03     1.72
QNB CorpQNBC07 – Financial0730 – S&Ls/Savings Banks         83.40     49.82     9.70     1.12     2.62
CCFNB Bancorp IncCCFN07 – Financial0727 – Regional Banks         78.40     26.99   12.00     1.05     3.75
Calvin B. Taylor Bankshares, ITYCB07 – Financial0727 – Regional Banks         75.70       3.84   17.80     0.95     5.11
Juniata Valley Financial CorpJUVF07 – Financial0730 – S&Ls/Savings Banks         73.20       7.85   18.80     1.50     4.35
Northwest Indiana BancorpNWIN07 – Financial0730 – S&Ls/Savings Banks         72.70       7.68     9.80     1.08     2.76
Franklin Financial Services CoFRAF07 – Financial0727 – Regional Banks         71.80     36.33   13.10     0.77     1.97
Rand Worldwide IncRWWI10 – Technology1036 – Software & Programming         67.60     24.38   41.70     2.05     0.85
Centrix Bank & TrustCXBT07 – Financial0727 – Regional Banks         67.40       7.17   12.00     1.29     2.26
Peoples BancorpPBNI07 – Financial0730 – S&Ls/Savings Banks         66.80       7.20   21.60     0.88     3.59
Reserve Petroleum CoRSRV06 – Energy0609 – Oil & Gas Operations         66.20     20.75   10.90     2.05     3.49
Harleysville Savings FinancialHARL07 – Financial0730 – S&Ls/Savings Banks         65.60     19.95   13.90     1.10     2.09
William Penn Bancorp IncWMPN07 – Financial0730 – S&Ls/Savings Banks         65.50     28.80   23.40     1.15     4.86
Kentucky Bancshares, Inc.KTYB07 – Financial0727 – Regional Banks         65.30       6.00     9.10     0.92     2.36
Community Bancorp VermontCMTV07 – Financial0727 – Regional Banks         64.50       5.31   13.70     1.50     2.82
Hennessy Advisors IncHNNA07 – Financial0718 – Investment Services         64.30       9.81   13.10     2.23     2.74
Monarch Cement CoMCEM02 – Capital Goods0212 – Construction – Raw Materials         63.40     13.42   21.00     0.96     0.69
Armanino Foods Of DistinctionAMNF05 – Consumer Non-Cyclical0515 – Food Processing         63.10     47.48   21.90     9.85     2.25
Q.E.P. Co., Inc.QEPC02 – Capital Goods0209 – Construction – Supplies and Fixtures         62.10     17.14     5.80     1.08     0.21
Commercial National FinancialCNAF07 – Financial0727 – Regional Banks         60.10     17.85   12.10     1.33     4.17
Croghan Bancshares, Inc.CHBH07 – Financial0727 – Regional Banks         57.90       8.63   12.80     0.86     2.72
Burnham Holdings IncBURCA02 – Capital Goods0209 – Construction – Supplies and Fixtures         57.20       6.66   12.80     1.29     0.42
Standard Financial Corp.STND07 – Financial0727 – Regional Banks         56.10     51.56   19.30     0.71     3.39
Choiceone Financial Services ICOFS07 – Financial0727 – Regional Banks         54.90     13.34   11.30     0.90     2.85
LICT CorporationLICT09 – Services0915 – Communications Services         54.00            –     6.70
Capital Properties IncCPTP09 – Services0939 – Rental & Leasing         52.80       4.80   34.80   34.78     6.86
Middlefield Banc CorpMBCN07 – Financial0727 – Regional Banks         52.70   101.40     8.10     1.00     1.87
CSB Bancorp Inc (Ohio)CSBB07 – Financial0730 – S&Ls/Savings Banks         52.00     20.90   10.10     1.00     2.49
Jeffersonville BancorpJFBC07 – Financial0727 – Regional Banks         51.70     17.69   11.80     1.03     2.71
Georgia-Carolina Bancshares InGECR07 – Financial0727 – Regional Banks         51.70     59.45     7.80     0.90     2.78
PSB Holdings Inc (Wisconsin)PSBQ07 – Financial0727 – Regional Banks         50.60     10.72     8.30     0.90     1.86
Consumers Bancorp, Inc.CBKM07 – Financial0730 – S&Ls/Savings Banks         49.30       2.72   14.00     1.33     2.86
Quality Products, Inc.QPDC02 – Capital Goods0218 – Misc. Capital Goods         47.70       3.78     8.30     4.84     1.63
Northway Financial, Inc.NWYF07 – Financial0727 – Regional Banks         47.10     10.26     6.70     1.03     1.41
Granite Falls Energy LLCGFGY01 – Basic Materials0103 – Chemical Manufacturing         45.90            –   15.30
George Risk Industries IncRSKIA09 – Services0972 – Security Systems & Services         45.20       9.89   11.40     1.40     4.27
F&M Bank CorpFMBM07 – Financial0727 – Regional Banks         43.30     11.21     9.00     0.84     1.63
Southern Michigan BancorpSOMC07 – Financial0727 – Regional Banks         42.50       5.33     9.40     0.77     2.15
Noble Roman’s, Inc.NROM09 – Services0942 – Restaurants         42.30     69.62   30.90     3.28     5.63
Minden Bancorp IncMDNB07 – Financial0730 – S&Ls/Savings Banks         41.60       3.50   12.80     0.98     4.07
Surrey BancorpSRYB07 – Financial0727 – Regional Banks         41.50       4.68   16.50     1.36     3.91
Corning Natural Gas Holding CoCNIG12 – Utilities1206 – Natural Gas Utilities         40.20       7.99   20.40     1.78     1.74
Pioneer RailcorpPRRR11 – Transportation1112 – Railroads         37.00       6.72   21.30     2.80     1.77
Ziegler Companies, Inc., TheZGCO07 – Financial0718 – Investment Services         35.70     27.00   17.60     1.10     0.45
XCel Brands IncXELB07 – Financial0721 – Misc. Financial Services         35.60       0.35     5.70     1.04     2.33
Security Federal Corporation (SFDL07 – Financial0730 – S&Ls/Savings Banks         35.40       8.42   13.20     0.63     1.14
Regency Affiliates IncRAFI12 – Utilities1203 – Electric Utilities         33.90       1.44     9.00     1.05
New Ulm Telecom IncNULM09 – Services0915 – Communications Services         33.50       5.90     8.90     0.59     0.90
Heritage Bankshares, Inc.HBKS07 – Financial0727 – Regional Banks         29.60       8.45   14.10     1.00     2.79
Home Loan Financial CorporatioHLFN07 – Financial0730 – S&Ls/Savings Banks         29.50       2.60     8.60     1.17     2.82
High Country Bancorp, Inc.HCBC07 – Financial0730 – S&Ls/Savings Banks         29.50       9.90   15.20     1.24     3.15
Commercial Bancshares, Inc. \OCMOH07 – Financial0727 – Regional Banks         29.10     14.76   10.30     0.95     2.06
South Street Financial Corp.SSFC07 – Financial0730 – S&Ls/Savings Banks         28.70   121.25   28.50     1.05     2.29
CreditRiskMonitor.Com IncCRMZ10 – Technology1018 – Computer Services         27.90       1.75   87.50     6.48     2.38
Smtp IncSMTPD10 – Technology1018 – Computer Services         25.80     27.23   20.60   15.57     4.46
West End Indiana Bancshares InWEIN07 – Financial0730 – S&Ls/Savings Banks         25.70       7.40   18.30     0.80     2.10
Northeast Indiana BancorpNIDB07 – Financial0730 – S&Ls/Savings Banks         25.50       6.21     9.30     0.92     2.55
Summit Financial Services GrouSFNS07 – Financial0718 – Investment Services         25.20     23.80   15.40     2.51     0.31
First Bancorp of Indiana, Inc.FBPI07 – Financial0730 – S&Ls/Savings Banks         24.90       2.85   16.00     0.86     1.88
Spindletop Oil & Gas CoSPND06 – Energy0609 – Oil & Gas Operations         24.40       3.17     7.30     1.28     1.89
Frederick County Bancorp (MD)FCBI07 – Financial0727 – Regional Banks         24.10       7.20   15.80     0.91     1.90
Meritage Hospitality Group IncMHGU09 – Services0942 – Restaurants         24.00       3.26     6.60     2.35     0.21
Pinnacle Bankshares CorpPPBN07 – Financial0727 – Regional Banks         24.00       7.95   17.90     0.85     1.54
CNB Financial Services IncCBFC07 – Financial0727 – Regional Banks         23.60            –   15.10     0.83     1.97
Investors Heritage Capital CorIHRC07 – Financial0709 – Insurance (Life)         23.50       8.28   11.70     0.44     0.29
Trans World CorporationTWOC09 – Services0912 – Casinos & Gaming         22.50       3.32   12.80     0.53     0.63
Pinnacle Bancshares, Inc.PCLB07 – Financial0727 – Regional Banks         21.70       4.46     9.10     0.82     2.33
FFW CorporationFFWC07 – Financial0730 – S&Ls/Savings Banks         21.40       6.74     9.10     0.93     1.66
ASB Financial Corp. (OH)ASBN07 – Financial0730 – S&Ls/Savings Banks         20.70       5.85   13.40     0.98     1.96
SBT Bancorp IncSBTB07 – Financial0727 – Regional Banks         20.50     21.95   13.50     1.06     1.72
Seychelle Environmental TechnoSYEV02 – Capital Goods0218 – Misc. Capital Goods         20.40     20.22   19.80     4.65     3.46
Great American BancorpGTPS07 – Financial0727 – Regional Banks         19.80       2.70   13.40     0.80     2.26
Sierra Monitor CorporationSRMC10 – Technology1030 – Scientific & Technical Instruments         19.70     12.68   15.00     2.41     1.10
Logansport Financial Corp.LOGN07 – Financial0724 – Money Center Banks         19.60       2.50     9.00     0.86     2.30
Seneca-Cayuga Bancorp IncSCAY07 – Financial0724 – Money Center Banks         19.60       1.24     9.50     1.00     1.64
Micropac Industries, Inc.MPAD10 – Technology1033 – Semiconductors         18.90       3.67   20.90     0.96     0.97
Texas Vanguard Oil CoTVOC06 – Energy0609 – Oil & Gas Operations         18.60       1.31   22.60     1.40     3.04
Issuer Direct CorpISDR09 – Services0909 – Business Services         18.30     46.92   20.90     7.19     3.26
Environmental Tectonics CorporETCC02 – Capital Goods0203 – Aerospace and Defense         17.90       3.22   21.70     2.47     0.55
Wells Financial Corp.WEFP07 – Financial0730 – S&Ls/Savings Banks         17.80     13.50   13.60     0.67     1.99
Sono-Tek CorporationSOTK02 – Capital Goods0218 – Misc. Capital Goods         17.40     37.68   60.00     2.79     1.89
DynTek, IncDYNE10 – Technology1036 – Software & Programming         17.00       0.80     5.00     2.23     0.13
Riverview Financial CorporatioRIVE07 – Financial0727 – Regional Banks         16.90     12.81   12.00     0.63     1.30
Paradise, Inc.PARF05 – Consumer Non-Cyclical0515 – Food Processing         16.60       3.20   18.80     0.78     0.66
Bank McKenney (VA)BOMK07 – Financial0727 – Regional Banks         16.60       4.30     9.10     0.73     1.55
Quaint Oak Bancorp IncQNTO07 – Financial0730 – S&Ls/Savings Banks         15.60     30.88   23.60     0.85     2.38
Greenville Federal Financial CGVFF07 – Financial0730 – S&Ls/Savings Banks         15.40       2.20   17.50     0.82     2.55
BV Financial IncBVFL07 – Financial0730 – S&Ls/Savings Banks         14.40       1.20   30.00     1.15     2.49
Jaclyn, Inc.JCLY04 – Consumer Cyclical0403 – Apparel/Accessories         13.70       2.70   15.40     0.62     0.08
OPT-Sciences CorpOPST10 – Technology1030 – Scientific & Technical Instruments         13.50       1.74   12.90     1.05     2.04
Citizens Bancshares CorporatioCZBS07 – Financial0727 – Regional Banks         13.30       1.94   11.40     0.40     1.02
Chino Commercial Bancorp (CA)CCBC07 – Financial0727 – Regional Banks         13.20       2.39   19.20     1.45     3.09
IEH CorporationIEHC10 – Technology1024 – Electronic Instruments & Controls         12.10     20.74     8.50     1.26     0.82
ITEX CorporationITEX07 – Financial0718 – Investment Services         11.60     15.20   10.50     0.88     0.72
Zynex Inc.ZYXI08 – Health Care0812 – Medical Equipment & Supplies         11.20       9.67     1.20     0.39
Great Lakes Aviation, Ltd.GLUX11 – Transportation1106 – Airline         10.50       8.07     0.27     0.08
Fairmount Bancorp IncFMTB07 – Financial0727 – Regional Banks           9.80       1.01   49.40     0.70     2.58
Solitron Devices, Inc.SODI10 – Technology1033 – Semiconductors           9.50     32.63   11.20     0.85     1.10
Repro-Med Systems, Inc.REPR08 – Health Care0812 – Medical Equipment & Supplies           7.70       3.80   21.00     1.62     0.96
Union Electric CompanyUELMO12 – Utilities1203 – Electric Utilities           7.60       4.70   25.40     2.39     2.78
Surge Components, Inc.SPRS10 – Technology1024 – Electronic Instruments & Controls           7.50     10.84     4.10     0.74     0.32
Home Financial BancorpHWEN07 – Financial0730 – S&Ls/Savings Banks           7.50       1.68   13.30     0.92     2.21
Alliance Distributors Holding,ADTR10 – Technology1015 – Computer Peripherals           7.50       2.70     5.70     1.31     0.11
Community Investors Bancorp InCIBN07 – Financial0730 – S&Ls/Savings Banks           7.10       6.48   73.60     0.57     1.15
M&F Bancorp, Inc.MFBP07 – Financial0727 – Regional Banks           7.10       4.38     0.30     0.65
China Industrial Steel IncCDNN01 – Basic Materials0121 – Iron & Steel           6.60       1.38     4.50     0.03
FPB Financial Corp.FPBF07 – Financial0730 – S&Ls/Savings Banks           5.20            –     8.90     0.97     1.78
NexCore Healthcare Capital CorNXCR08 – Health Care0806 – Healthcare Facilities           5.10       0.02     2.00     0.45     0.37
Precision Auto CarePACI09 – Services0909 – Business Services           5.00       0.17     7.30     0.26     0.19
Scientific Industries, Inc.SCND10 – Technology1030 – Scientific & Technical Instruments           4.80       2.34   12.40     0.89     0.68
Tidelands Royalty Trust BTIRTZ07 – Financial0721 – Misc. Financial Services           4.70       9.01     9.20     7.91     6.73
Foxby CorpFXBY07 – Financial0721 – Misc. Financial Services           4.70       1.09     6.50     0.77   23.62
TNR Technical, Inc.TNRK10 – Technology1024 – Electronic Instruments & Controls           3.80       4.31   12.30     0.99     0.41
Information Analysis IncorporaIAIC10 – Technology1036 – Software & Programming           2.40       1.97     1.19     0.44
Microwave Filter Co., IncMFCO10 – Technology1024 – Electronic Instruments & Controls           1.70       1.50     1.03     0.53
Bayou City Exploration, Inc.BYCX06 – Energy0609 – Oil & Gas Operations           1.50       0.81     2.70     0.73     0.44
Tongli Pharmaceuticals (USA) ITGLP08 – Health Care0803 – Biotechnology & Drugs           0.90       0.01     0.40     0.04     0.07

Lotsa little banks and tech companies.  Hey, I’m going to throw those with over $100 million of market cap into my next portfolio reshaping.  I’m still small enough as a manager to deal with small companies if they are well-managed.  This can bring me back to my microcap value days, where I invested 1992-1998.  Once I made an offer to buy more than 5% of a company, and I asked my bosses if they would have any problems if I had to make a 13F filing.  They gave me the go ahead; I made my offer and it was turned down.  Pity, because if it had worked, it would have been a great investment.

The table above is a beginning for due diligence.  I do not recommend any of the stocks there.  I do note that my reader’s stock is high on the list.

Some of these stocks could be good investments, but you would have to do the research to figure out which ones are good.  On the bright side, almost no one is analyzing these companies, so your analysis has more punch relative to company outsiders.  Insiders will still do better.

All that said, I suspect that these stocks will do well on average.