Chasing Value: Gramercy Capital (GKK) has 14% yield - wow!

Filed under: Bargain stocks, Chasing Value, Stock screen, Stocks to Buy, Best Stocks for 2008, Gramercy Capital (GKK)

Every once in a while I run a stock screen to see if anything passes some very stringent criteria, only to find nothing passes through. Yesterday something did come up: Gramercy Capital Corp. (NYSE: GKK). Here was my criteria on the screen, along with Gramercy's numbers:

• One year sales growth had to be at least 20% (65%)


• Minimum profit margin of 20% (49%)


• Maximum Price-to-sales ratio under 3 (2)


• Stock price between $10 ad $25 ($17)


• Market capitalization under $1 billion ($900 million)

I could have added more criteria because to my pleasant surprise Gramercy is paying over a 14% yield, has a very low trailing P/E of of 3.34 and forward looking guess of 5.7. Furthermore, it has Return on Equity (ROE) Per Share of 29.84% and a Price-to-book of 1.26. So everything is looking good, but is it a value or value trap?

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