If you want to have a higher chance to find stocks that can beat the market over the next several years, you may want to screen for stocks with a favorable Shiller price-earnings ratio, as they have a good chance of being value opportunities.
The following stocks have a Shiller price-earnings ratio that stands below the S&P 500 index's historical average of 16.72 (as of July 28).
One Liberty Properties Inc
The first company that meets the above criteria is One Liberty Properties Inc (OLP, Financial), a Great Neck, New York-based real estate investment trust company.
One Liberty Properties Inc has a Shiller price-earnings ratio of 13.03, which results from Tuesday’s share price of $17.46 and inflation adjusted earnings per share of $1.34 per year on average over the past 10 years.
The stock price fell by 39% over the past year, determining a market capitalization of $351.45 million and a 52-week range of $9.71 to $31.78.
GuruFocus has assigned a low rating of 3 out of 10 to the company’s financial strength and a very good rating of 7 out of 10 to its profitability.
The stock has a hold recommendation rating on Wall Street and an average target price of $15.50 per share.
Washington REIT
The second company that makes the cut is Washington REIT (WRE, Financial), a Washington-based real estate investment trust company with a portfolio of 45 properties, including nearly 4 million square feet of commercial space and more than 6,850 multifamily apartment units.
Washington REIT has a Shiller price-earnings ratio of 15.97 (versus the industry median of 13.26), which is the result of a share price of $21.88 as of July 28 and inflation adjusted earnings per share of $1.37 per year on average over the past 10 years.
The share price fell by 19.2% over the past year for a market capitalization of $1.8 billion and a 52-week range of $18.01 to $32.22.
GuruFocus has assigned a low rating of 3 out of 10 to the company’s financial strength and a positive rating of 6 out of 10 to its profitability.
As of July, the stock has one strong buy recommendation rating, three buy recommendation ratings and three hold recommendation ratings on Wall Street. The target prices average $26 per share.
Kaman Corp
The third company that qualifies is Kaman Corp (KAMN, Financial), a Bloomfield, Connecticut-based aerospace and defense company.
Kaman Corp has a Shiller price-earnings ratio of 15.10 (versus the industry median of 22.86), which is the result of a share price of $39.86 as of July 28 and inflation adjusted earnings per share of $2.64 per year on average over the past 10 years.
The stock price fell by almost 38% in the past year for a market capitalization of $1.1 billion and a 52-week range of $29.38 to $68.24.
GuruFocus has assigned a positive rating of 6 out of 10 to the company’s financial strength and a very good rating of 7 out of 10 to its profitability.
The stock has a hold recommendation rating on Wall Street and an average target price of $46.33 per share.
Disclosure: I have no positions in any securities mentioned in this article.
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