5 Best Micro-Cap Stocks to Buy Now

3. Revlon, Inc. (NYSE:REV)

No of HFs: 32

Total Value of HF: $253 Million

REV stands 3rd on the list of 15 best micro-cap stocks to buy now. One of the biggest hedge funds having stakes in REV is Parvinder Thiara’s Athanor Capital which had $1 million invested in the stock at the end of September. An insider purchased 20,000 shares at around $23 in June 2019. The stock is down 52% since then. Mittleman Brothers mentioned REV in their Q3 2020 investor letter:

“Revlon’s (REV) stock price has been a disaster calendar YTD, dropping from $21.42 on 31 December 2019 to a low of $4.81 on 26 October 2020 (-78% to $256M market cap.).

Revlon is in a very tight spot now as it urgently needs to refinance $345M in 5.75% notes due on 15 February 2021. These bonds are trading just under $30 currently (par $100), somewhat like Revlon’s notes did in 2002 when its 8.625% notes (due in 2008) dropped to $32 before recovering to $100 (after Perelman provided more capital).

MIM asserts that Revlon’s liquidity issues are not a solvency issue, so once cured with asset sales or capital infused by Ron Perelman⁵, much better times lie ahead for Revlon. MIM thinks the probability is very low that Perelman would risk his 87% stake in Revlon to the vagaries of a Federal Bankruptcy Court.