Benchmark Electronics (BHE) has seen its shares drop over 16% this year, but investors should not give up on the Angleton, Texas-based manufacturer, said Jay Kaplan, portfolio manager for the Royce Small-Cap Value Fund. ‘They are starting to change the business,’ said Kaplan. ‘They are moving away from computing and telecom, which are commodities and short-cycle, and moving toward industrial and medical which are longer cycles and where they get paid for it.’ The contrarian Royce Small-Cap Value Fund is down 7.4% this year, according to fund-tracker Morningstar. Kaplan is also bullish on SAIA (SAIA), down 35% year-to-date, saying the less-than-truckload transportation company will benefit from an improving economy and improving margins. ‘They are actually firing customers who don’t pay them enough and raising prices,’ said Kaplan, adding that the company trades at a cheap forward multiple of 14 times trailing twelve month earnings. Kaplan is also bullish on Trustco Bank (TRST), which is down 21% thus far in 2014, despite a recent ruling by a regulator that it needs to clean-up its audit system. ‘It will cost them around $5 million, or a year’s worth of earnings or so, to get the back office in shape, but they are a traditional mortgage lender with a 4.5% dividend yield,’ said Kaplan. ‘Someday when the yield curve steepens as rates go up, it’s going to be really good for their business.’
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
