It had to end sometime. On Tuesday, the S&P 500 declined 0.20%, while the Dow Jones Industrial Average dropped 0.15%, snapping an eight-day winning streak for the U.S. markets.
The bad news is that the S&P 500 could have tied its best winning streak of 9 consecutive daily gains from November 2004. Instead, investors will have to live with a nearly 8% gain over the eight-day streak that puts it within 73 points of a 52-week high.
Oh, how times have changed.
In yesterday’s trading, 12 stocks with share prices over $10 hit 52-week lows. Three of them should appeal to aggressive and patient investors alike.
New Fortress Energy
It's been a long time since I’ve considered anything related to Wes Edens, the CEO and founder of New Fortress Energy (NFE), the developer of natural gas and liquified natural gas (LNG) powered infrastructure.
Edens founded the company in 2014 after doing very well with Fortress Investment Group, which he co-founded in 1998. It is majority-owned by Mubadala Capital, the investment arm of the government of Abu Dhabi. Wes Edens is New Fortress Energy’s largest shareholder,r with 35.4% of the equity.
I’ve recently read a lot about EREVs (extended-range electric vehicles). These vehicles come with a smaller electric battery (or two) than a traditional fully electric vehicle and also have a V6 gas-powered engine whose sole purpose is to charge the electric battery. By doing this, the range of these EREVs is extended considerably—in the case of the Ram 1500 Ramcharger, to 690 miles from 141 miles on the electric batteries alone.
I mention this because Edens is doing the same at Fortress Energy: NFE provides businesses with LNG solutions that enable them to generate cleaner, less costly energy to power their facilities or provide to customers. NFE was ahead of the curve, but the world is catching up.
New Fortress went public at $14 in January 2019. It is down 66% year to date and trading below its IPO price. In July, it started production at its FLNG 1 floating LNG facility, expected to generate $500 million annually in free cash flow.
If you are patient and aggressive, NFE could be for you.
Wabash National
On Tuesday, Wabash National (WNC) hit its 11th 52-week low of the past 12 months. Its stock is down 25% in 2024 and 14% over the past year. It hasn’t traded this low since October 2022.
The Indiana-based company manufactures dry freight and refrigerated trailers, flatbed trailers, tank trailers, dry and refrigerated truck bodies, and structural composite panels. It also makes specialty food-grade processing equipment.
Wabash currently faces significant headwinds that have hurt sales — down 21% in Q2 2024 to $498.7 million -- and operating profits ——own 51% to $56.9 million —n the near term.
It has two operating segments: Transportation Solutions (91% of revenue) and Parts & Services (9%). They both experienced declining revenue and profits in the second quarter. However, the latter’s operating margin was 120 basis points higher, so that’s a win, albeit on much smaller sales.
The company cut its 2024 guidance as a result. It now expects $2.1 billion in revenue at the midpoint with $1.55 earnings per share. It currently trades at 12.3x this estimate.
According to S&P Global Market Intelligence, its current price-to-tangible book value ratio is 3.35x, lower than it’s been since September 2012.
I noticed that Pacer Advisors owns 5.4% of Wabash. I like many of their ETFs. Most of the position is held by the Pacer US Small Cap Cash Cows 100 ETF (CALF). The ETF provider’s Cash Cow series is worth owning. But I digress.
If you’re a patient investor -- you don’t have to be aggressive to own this stock -- you should do well in 2025.
Greystone Housing Impact Investors
Greystone Housing Impact Investors (GHI) is the last of this trio of stocks hitting a 52-week low yesterday. It was the micro-cap stock’s 19th 52-week low of the past year. Its shares are down 13% over the past 52 weeks. They once traded as high as $24 in September 2019.
Here’s a blurb about the company.
“Greystone Housing Impact Investors LP (NYSE: GHI) formerly known as America First Multifamily Investors, L.P. was formed in 1998 under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds which have been issued to provide construction and/or permanent financing for affordable multifamily, student housing and commercial properties,” states its investor relations site.
I have a friend who runs a non-profit affordable housing initiative in Nova Scotia, where I live. The initiative buys them up, renovates them, and then rents them for below-market rents. There’s a massive need.
To grow, it is acquiring additional mortgage revenue bonds (MRBs), debt instruments issued by state and local governments for “the construction or acquisition and rehabilitation of income-producing multifamily rental properties,” states its 2023 10-K.
So, my friend, if she were in the U.S., might seek out funds through MRBs.
MRBs are attractive investments because their income is generally exempt from federal taxes. They provide low-interest mortgages to lower-income and first-time homebuyers, making them appealing to investors looking to make a social impact on the housing shortage.
They are, however, not without risk.
In May 2020, the company, then known as America First Multifamily Investors L.P., cut its quarterly distribution by 50% to $0.18 a quarter. This provided financial flexibility as it worked through the missed payments on its MRB portfolio due to Covid-19.
In December 2022, it changed its name to Greystone to reflect that its general partner is an affiliate of Greystone, a leader in commercial real estate finance in the U.S.
So far, in 2024, it’s paid out $0.81 in cash and BUC (beneficial unit certificates) distributions. Last year, it paid out $1.69 and $2.14 in 2021. The annualized rate of $1.62 yields 11.8%.
If you’re an income investor, you’ll want to look closer. I know I will.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
