This Small-Cap Stock Is a Strong Pick for Value Investors

FNKO is up nearly 70% in the past 12 months

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On Tuesday, Jan. 4, Funko Inc (NASDAQ:FNKO) announced that Charles Denson was appointed Chairman of the Board effective immediately. Also, effective immediately, Chief Executive Officer Andrew Perlmutter, who was appointed Chief Executive Officer on Monday, Jan. 3 will join the board.

Funko stock has increased an impressive 70% in price year-over-year, though pressure at both the $20 level and the 180-day moving average have kept a lid on shares during the past few months. The stock does seem to have found at floor near the $16 level, though, while the 320-day moving average helped capture a sharp pullback in late-November.

fnko jan 10

Moreover, Funko has managed to increase its revenues and net income 34% and 339%, respectively, since fiscal 2018, despite having experienced an 18% decrease in revenues and a 66% drop in net income for fiscal 2020. FNKO is also expected to see a 12.6% increase in earnings and a 7.5% increase in revenues for 2022. In addition, Funko stock holds an decent valuation with a price-earnings ratio of 16.48 and a price-sales ratio of 0.74, overall making it a viable option for value investors despite being a small-cap stock.

Additionally, options traders have been much more pessimistic lately, and an unwinding of some of this bearishness could put additional wind at FNKO's back. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day put/call volume ratio of 0.66, which stands higher than all other readings from the past year. This means while calls are still outnumbering puts on an overall basis, these bearish bets haven't been more popular in the past year. 

 




 
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