Benjamin Graham, the father of value investing, suggested to pick those stocks whose “Graham blended multiplier” yields less than the value of 22.5. The Graham blended mulitplier is the price-earnings ratio of the stock multiplied by its price-book ratio.
Thus, the following stocks, which have a Graham blended multiplier of less than 22.5, may provide value opportunities.
Enbridge Inc
The first result of my search is Enbridge Inc (ENB, Financial).
Shares of the Canadian energy infrastructure company closed at a price of $27.21 per unit on April 1 for a market capitalization of $55.54 billion.
The stock has a Graham blended multiplier of 19.68, as the price-earnings ratio is 14.69 and the price-book ratio is 1.34. The industry has a median of 7 for the price-earnings ratio and a median of 0.55 for the price-book ratio.
According to the Peter Lynch chart, the stock trades at a fair price.
The 52-week range is $22.57 to $43.15. Enbridge Inc offers a dividend yield of 8.3% as of April 1.
Wall Street issued an overweight recommendation rating for this stock with an average target price of $37.82 per share.
B&G Foods Inc
The second stock resulting from my search is B&G Foods Inc (BGS, Financial).
Shares of the Parsippany, New Jersey-based manufacturer and seller of shelf-stable and frozen foods and household products closed at a price of $17.59 per unit on April 1 for a market capitalization of $1.13 billion.
The stock has a Graham blended multiplier of 20.72, as the price-earnings ratio is 14.91 and the price-book ratio is 1.39. The industry has a median of 16.6 for the price-earnings ratio and of 1.15 for the price-book ratio.
According to the Peter Lynch chart, the stock trades at a fair price.
The 52-week range is $10.39 to $26.13. B&G Foods Inc offers a dividend yield of 10.8% as of April 1.
Wall Street issued a hold recommendation rating for this stock with an average target price of $15.43 per share.
Anika Therapeutics Inc
The third company resulting from my search is Anika Therapeutics Inc (ANIK, Financial).
Shares of the Bedford, Massachusetts-based biotech provider of orthopedic treatments closed at a price of $28.47 per unit on April 1 for a market capitalization of $403.37 million.
The stock has a Graham blended multiplier of 21.72, as the price-earnings ratio is 14.98 and the price-book ratio is 1.45. The industry has a median of 34.08 for the price-earnings ratio and of 3.01 for the price-book ratio.
According to the Peter Lynch chart, the stock trades at a fair price.
The 52-week range is $22.01 to $75.72. Anika Therapeutics Inc doesn’t pay dividends.
Wall Street issued a buy recommendation rating for this stock with an average target price of $62 per share.
Disclosure: I have no positions in any securities mentioned.
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