One way to unearth value opportunities is to screen for stocks that are trading below their Graham Number, as such stocks could be trading at discount to their intrinsic value. The Graham Number is calculated as the square root of "earnings per share times book value per share times 22.5."
Thus, investors could be interested in the following stocks, as they are trading below their Graham Numbers.
Berkshire Hathaway Inc
The first stock investors could be interested in is Berkshire Hathaway Inc (BRK.A, Financial) (BRK.B, Financial), an Omaha, Nebraska-based international conglomerate holding company.
At close on Monday, the price was $439,460 per share of Class A common stock and $292.33 per share of Class B common stock. The prices are below their respective Graham Numbers of $577,175.63 and $384.78 as of the March 2021 quarter. As a result, the price-to-Graham-Number ratio is 0.76 for class A shares and for class B shares. The market capitalization hovers around $668.17 billion.
Class A share price chart:
The class A share price has climbed 65.17% over the past 52 weeks, fluctuating between a low of $250,926.02 and a high of $445,000.
Class B share price chart:
The class B share price has climbed 69.16% over the past 52 weeks, fluctuating between a low of $167.0401 and a high of $295.083.
GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and 7 out of 10 for its profitability.
On Wall Street, the class A common stock has a median recommendation rating of overweight with an average price target of nearly $447,000 per share, while the class B common stock has a median recommendation rating of overweight with an average target price of $298 per share.
General Motors Co
The second stock investors could be interested in is General Motors Co (GM, Financial), a Detroit-based automaker.
The stock traded at a price of $57.41 per share at close on Monday, which is below the Graham Number of $64.31 as of the March 2021 quarter, for a price-to-Graham-Number ratio of approximately 0.89.
The stock has risen by 154.48% over the past year for a market capitalization of $83.28 billion and a 52-week range of $20.49 to $63.44.
GuruFocus has assigned a score of 4 out of 10 for the company's financial strength and 6 out of 10 for its profitability.
On Wall Street, the stock has a median recommendation rating of buy with an average price target of $71.31 per share.
Capital One Financial Corp
The third company investors could be interested in is Capital One Financial Corp (COF, Financial), a McLean, Virginia-based provider of financial and credit services to consumers and commercial clients in North America and the UK.
The stock traded at a price of $157.38 per share at close on Monday, which is below the Graham Number of $186.84 as of the March 2021 quarter, for a price-to-Graham-Number ratio of 0.84.
The stock has increased by 170.88% over the past year for a market capitalization of $71.06 billion and a 52-week range of $51.91 to $160.365.
GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and 6 out of 10 for its profitability.
On Wall Street, the stock has a median recommendation rating of buy with an average price target of $161.94 per share.
Disclosure: I have no positions in any security mentioned in this article.
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