Three Ridiculously Cheap Stocks

How cheap? Well, every single one of these sells for less than 1x earnings

If you turn over enough rocks, particularly in an out-of-the-way market such as Vietnam’s, you’re almost certain to find cheap stocks.

Some of these will be so ridiculously cheap that you’d have no problem concentrating all of your funds in them.

Actually, you might have a problem doing so, but I wouldn’t.

In fact, after going through all the stocks on UPCoM, one of Vietnam’s exchanges, I found three that I’d invest all of my money in if I could.

Wait, did I just say I’d invest my entire portfolio in only three stocks?

Yes, I did!

If I could, I’d even do so with leverage—and faster than a cheetah on speed.

The first is Hai Phong Funeral Services, CPH.

This company, as you might expect from its name, has stable (and modestly-growing revenues) of just over 100 billion VND.

Last year, it earned 10 billion VND on 132 billion VND of revenue, amounting to 2,310 VND per share.

The company has a book value of 12,750 VND per share and has paid a steadily-growing dividend over the years from 1,570 VND per share in 2018 to 1,848 VND per share in 2023.

Its last listed price was 300 VND—meaning this business is on sale for 0.13x earnings and 0.02x book value.

The second is Fomeco, or Pho Yen Mechanical Joint Stock Company, FBC.

This company manufactures ball bearings and other spare parts for motorbikes and automobiles.

Its revenues in 2023 were 1 trillion VND and its net profits were 72.6 billion VND, or 19,640 VND per share.

(As a quick reminder, 1 USD equals around 25,000 VND, so in the case above the company earned approximately $3 million on revenues of roughly $40 million.)

Fomeco has a book value of 40,590 VND per share and, like CPH above, has steadily increased its dividend over the years—from 3,500 VND per share in 2020 to a whopping 20,000 VND per share in 2023.

Its last quoted price was 3,700 VND per share—meaning this business is on sale for 0.19x earnings and 0.09x book value.

The third is Da Nang Water Supply Joint Stock Company, DNN.

This company has steadily-growing revenues, which makes sense given the industry it’s in and the city it serves.

In 2023 it earned 156 billion VND, or 4,620 VND per share, on revenues of 596 billion VND.

The company has a book value of 13,960 VND per share and pays a yearly dividend, which last year was 1,700 VND per share.

At 200 VND, its last quoted share price, this business is on sale for 0.04x earnings and 0.01x book value.

Now if your mouth isn’t watering at these numbers, I don’t know what to tell you, but maybe value investing isn’t for you!

If it is, however, you may be wondering something—namely:

How are these stocks so ridiculously cheap?

The answer is related to something I said earlier—that I would invest all of my money in them if I could.

Because that’s the catch.

Waiting for these shares to trade feels like not only waiting for the cows to come home, but for them to put on their pajamas, tuck themselves into bed, wish each other sweet dreams, and turn off the lights.

The shares are almost entirely owned by a combination of bigger companies or government bureaucracies, and basically never trade at all—which is why their share prices are stuck in the past.

So, what can you do with this information?

I don’t know, but I’ll tell you what I’ve done:

I’ve put these businesses on a list, along with other stocks that are just as cheap, so that if the opportunity to own them shows up in the future, even at prices far higher than today’s, I’ll be ready.

I’ve also looked into who owns them.

VEA, for example, is a business I’ve owned shares of for years, and it owns 51% of Fomeco, the second stock above.

But we can talk about VEA later (and probably will).

In the meantime, if you’re looking for stocks that are both cheap and a lot more liquid, stay tuned!