Three cheap small to mid caps stocks to buy now – MoneyWeek

TitanEurope(LSE:TSW)isaninternationalengineeringgroupdesigning,developing,manufacturinganddistributingproductsandservicesfororiginalequipmentmanufacturers(OEMs)suchasCaterpillarandJohnDeere。

Itfocusesonglobalconstruction(around50%ofrevenue),mining(20%)andagriculturalmachinery(30%)。

Theoutlookhasbeenimprovingdramaticallyinrecentmonths,confirmedbyupbeatcommentaryfromtheequipmentmanufacturersthemselves。

Titandesignsandmanufactureswheels(44%)andundercarriagecomponentsandassemblies(56%)fortrackedandwheeledoff-roadvehicles。

Thehighdebtfigure(about£150m)isanissue,butthefirmsmainbanks(IntesaSanPaolo/UniCredit)appearsupportive,andcreditfacilitiesweresuccessfullyrenegotiatedinMay2009。

Thereisalsoconsiderablenetassetvaluesupportof172ppershare。

Therearetwolargecorporateshareholdersontheregister:aprivatelyownedGermanpeer,MefroWheels(29。

9%),andalsotheUS-listedTitanInternational。

Thelattermadeanallpaperbidinthespringof2008。

Italreadyholds17%ofTitanEuropeandif,asproposed,itbuysGoodyearsagriculturaltyresbusinessinEuropethenabidforTitanEuropeswheelsbusiness(ifnotthewholething)lookssensible。

Ournexttip,Landkom(LSE:LKI),isaUkrainian-basedproducerofsoftcommodities,includingrapeseed,wheat,barley,maizeandsoyabean,withagrowinglandbank。

Givenitslocation,whichboastsabundantagriculturallandandlargeamountsoflabour,thebusinesshasthepotentialtoexecutelow-costfarming,andcompetewithotherfarmingregions。

InvestorswhoknewtheLandkombusinesstwoyearsagomaybewary。

However,theissuesthatcausedthesharepricetofallfrommorethan100ppersharetotherecentlowsofjust2p–thepoorlytimedpurchaseoffarmequipmentandfertiliseratthepeakofthecommodityboomin2008andaheavyrelianceononecrop,winterwheat–havebeencorrected。

TheBritishmanagementteamhasalsolargelybeenreplaced,withCEOVitaliySkotsyknowincontrol。

Theinterimsfor20Julyreassuredwithasharpfall(over35%)inoperatingcostsperhectare。

Meanwhile,cropprices,andparticularlythoseofwheat(up50%sincetheendofJune),havespikeddramatically。

Thegroupisontargettobreakevenonacash-flowbasisthisyear。

Wethinkthereisevenscopeforasurprisetotheupside?

Ourfinalpick,NestorHealthcare(LSE:NSR)providesarangeofstaffingandmanagedservicestobothhealthandsocialcaremarketsintheUK。

Around70%ofrevenuecomesfromsocialcareandtheremaining30%fromprimarycare。

Socialcareencompassesnon-medicalservicesofferedtocarefortheill,elderlyordisabledintheirhomes。

Theaimistoallowthemtolivefreeofinstitutionalisationwherepossible。

Theprimary-caredivisionismainlyinvolvedinprovidingout-of-hoursservices–sayifamedicalemergencyoccursoutsideofnormalGPhours。

90%+ofrevenuecomesfromlocalauthoritiesandtheNHS。

However,theriskslinkedtospendingcutsareslim,giventhecomparativelyhighcosttothegovernmentofpullingthesecontracts。

Furthermore,themaingrowthdriver–anageingUKpopulation–isnotabouttogoaway。

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