If in search of bargain opportunities, value investors may want to consider the three securities listed in this article, as their share prices are trading near or below the intrinsic value estimated by the GuruFocus Value Line.
The GF Value is a unique intrinsic value calculation from GuruFocus that takes into account the combination of the following three components:
- The stock's historical multiples such as the price-earnings (PE) ratio, the price-sales (PS) ratio, the price-book (PB) ratio and the price-to-free-cash-flow (PFCF) ratio.
- A GuruFocus adjustment factor, which is based on the past returns and growth of the company's operating activities.
- Estimations of future business performance.
KT Corp
The first stock that meets the above criteria is KT Corp (KT, Financial), a South Korean global operator of telecommunications services.
KT Corp's share price was $10.77 at close on Friday while its GF Value stands at $13.28, resulting in a price-to-GF-value ratio of 0.81 and a rating of "modestly undervalued."
The stock lost 0.72% over the past year, determining a market capitalization of $5.21 billion and a 52-week range of $6.66 to $11.50.
The price-earnings ratio is 9.05 (versus the industry median of 19.46) and the price-book ratio is 0.44 (versus the industry median of 2.10). Also, the price-sales ratio is 0.26 (versus the industry median of 1.65) and the price-to-free-cash-flow ratio is 11.98 (versus the industry median of 11.43). The stock has a GuruFocus profitability rating of 4 out of 10.
Concerning future business performance, sell-side analysts on Wall Street estimate that earnings per share will move up by an average annual growth rate of 4.1% over the next five years. As of January, the stock has two hold recommendation ratings.
World Fuel Services Corp
The second stock that meets the above criteria is World Fuel Services Corp (INT, Financial), a Miami, Florida-based supplier of fuel and related products and services to the aviation, marine and land transportation industries worldwide.
World Fuel Services Corp's share price was $33.11 at close on Friday compared to its GF Value of $30.27, resulting in a price-to-GF-value ratio of 1.09 and a rating of "fairly valued."
The stock has a market capitalization of $2.1 billion as a result of a nearly 16% decrease that occurred over the past year. The 52-week range is $18.36 to $40.84.
The price-earnings ratio is 12.64 (versus the industry median of 14.29) and the price-book ratio is 1.09 (versus the industry median of 1.03). The price-sales ratio is 0.09 (compared to the industry median of 0.98) and the price-to-free-cash-flow ratio is 4.35 (versus the industry median of 7.77). The GuruFocus profitability rating is 6 out of 10.
Concerning future business performance, sell-side analysts on Wall Street forecast that the earnings per share will increase by 5% per annum over the next five years. As of January, the stock has one strong buy recommendation rating, two hold recommendation ratings and one underperform recommendation rating for an average target price of $36.50 per share.
Ardmore Shipping Corp
The third stock that meets the above criteria is Ardmore Shipping Corp (ASC, Financial), a Bermuda-based marine shipping company for petroleum products and chemicals.
Ardmore's share price was trading at $3.35 at close on Friday compared to the GF Value of $4.57. Thus, Ardmore's price-to-GF-value ratio is 0.73, and the stock earns a rating of "modestly undervalued."
The stock has a market capitalization of $111.51 million after a nearly 50% fall that took place over the last year. The 52-week range is $2.61 to $7.92.
The price-earnings ratio is 7.13 (compared to the industry median of 19.13) and the price-book ratio is 0.33 (versus the industry median of 1.21). The price-sales ratio is 0.47 (versus the industry median of 0.94) and the price-to-free-cash-flow ratio is 3.27 (versus the industry median of 10.52). GuruFocus has assigned the stock a profitability rating of 5 out of 10.
With regard to future business performance, sell-side analysts on Wall Street predict that the earnings per share will increase by 42.64% every year over the next five years. As of January, the stock has four strong buy recommendation ratings, seven buy recommendation ratings and one hold recommendation rating for an average target price of $5.43 per share.
Disclosure: I have no position in any security mentioned.
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