XBiotech Inc. (NASDAQ: XBIT) is a clinical-stage biopharmaceutical company headquartered in Austin, Texas. Geographically, all of its operations are in the United States.
The company discovers and develops “true human” antibody technology to treat a variety of diseases.
XBiotech primarily focuses on developing MABp1 – a therapeutic antibody as a treatment for cancer.
XBIT is my top small cap value stock to buy now because it has one of the lowest 12-month trailing price-to-earnings (P/E) ratios of any firm its size. A low P/E ratio essentially means you’re paying less for each dollar of profit generated.
Since the company has $0 in debt and massive earnings relative to its $426 million market cap, profits can be returned to shareholders in the form of dividends and buybacks.
The company went from losing $21 million in fiscal 2018 to profiting $668 million in 2019.
So that gives it a 12-month trailing P/E of 0.9. And back in January, the firm announced it will use much of those profits to repurchase up to $420 million of its own shares.
XBiotech also has new 30,000 square foot infection disease R&D facility on the way. That will allow the company to develop significantly more monoclonal antibody medicines for cancer patients.
The new facility will in turn boost XBIT’s net income significantly and the stock could easily double once its fully operational. With those extra profits, I expect the company to begin paying a dividend to its shareholders.
EDITOR'S NOTE: This is the 1st issue of a 3-part series looking at small-cap stocks. In this edition, we looked at the best value stock. Next, we'll look at the best small-cap growth stock whose EPS jumped 47,900% in the last 12 months.
You have to see it to believe it…