`Certifiably dull" stocks excite investment pro David Leibowitz. He seeks them out because, he argues, they can be sleepers--undiscovered and underpriced. Two that Leibowitz is crazy about are Myers Industries (MYE) and Justin Industries (JSTN). Their common thread: Both are trading close to their lows but have solid prospects for a turnaround, says Leibowitz, managing director at Burnham Securities.
Myers Industries, a maker of tire-repair materials and other prosaic plastic, rubber, and metal products, including cabinets and toolboxes, has racked up record sales and earnings in 9 of the past 10 years, notes Leibowitz. It has also increased dividends almost every year. In spite of that record and good prospects for further gains, notes Leibowitz, the stock is trading at 14, not far from its low of 12 7/8.
Leibowitz thinks the Street will wake up when earnings jump to $1.30 a share next year, up from an estimated $1.17 this year. It earned $1.17 last year. In 12 months, he says, the stock will hit 20.
Justin Industries, a maker of boots and bricks, is in the same kind of limbo: Its stock, at 11, is out of favor, falling some 70% in less than two years. It slid when boot sales stumbled and demand for bricks crumbled in the housing slump.
Leibowitz thinks the drop is a great opportunity: He sees boots coming back and housing rebounding this year. "With interest rates in a downslope and the economy holding up, consumer markets and the housing industry should get a lift," says Leibowitz. He figures Justin will make $1 a share this year and $1.35 next year, vs. last year's $1.33.