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How Many Stocks Can Pass GuruFocus Value Screeners? - Feb. 3, 2014

February 07, 2014 | About:
Vera Yuan

Vera Yuan

87 followers

GuruFocus provides value screeners for our Premium members to generate ideas with proven value strategies. GuruFocus All-In-One Screener also allows subscribers to create their own value screeners with more than 150 filters. Here we want to see how many companies pass different stock screeners in different regions and which companies can pass the most of the screeners. The November and December of 2013 stock lists can be seen here and here separately.

The following are the number of companies that pass the screeners:

Note: Peter Lynch Screener and Walter Schloss Screener can be found through All-in-One Guru Screener. The complete stock list can be seen by clicking the link.

We can clearly see that Asian markets are where we can find most of Ben Graham Net-Nets and Walter Schloss picks. This is not surprising as emerging markets lost their favor. Chinese stock markets are traded at five-year lows.

On Nov 4, 2013, chairman of Oaktree Capital Group LLC, Howard Marks, said in Shanghai that China’s equities are “tremendous bargains” while U.S. stocks are “fairly to fully valued.” He believed just as investors were too optimistic to China’s market three years ago, now they were too pessimistic. Right now the Shanghai Composite's price-to-book ratio is about half of 2010's level and the P/E multiple is 42% lower. “We are investing in Chinese equities along with emerging markets,” Marks said. “Investors have lost all confidence in China.” Our screeners indicate that compared with last month, a lot more bargains can be found in Asia now.

The following are the U.S. stocks that passed at least three screeners as of Feb. 3, 2014:

Table 1: Stocks Pass At Least Three Screeners - US

                   
 

GSOL

BIG

WTW

DE

IPAR

RCII

LGTHF

SECCY

STRA

ITUB

Benjamin Graham

                   

Undervalued Predictable

X

X

X

X

X

X

     

X

Buffett-Munger

X

 

X

X

X

X

     

X

Low P/S

 

X

X

     

X

X

X

X

Low P/B

X

         

X

X

X

 

Peter Lynch

 

X

 

X

X

X

X

X

X

 

Walter Schloss

                   
 

SNP

IBM

WMT

             

Benjamin Graham

                   

Undervalued Predictable

 

X

X

             

Buffett-Munger

X

X

               

Low P/S

X

 

X

             

Low P/B

X

 

X

             

Peter Lynch

   

X

             

Walter Schloss

 

X

               

The following are the Canadian stocks that passed at least two screeners as of Feb. 3, 2014:

Table 2: Stocks Passed At Least Two Screeners - Canada

               
 

ACN

AVS.H

BEV.H

CRG

DNC

GRG

JTC

MLR

Benjamin Graham

X

X

X

X

X

X

X

X

Undervalued Predictable

               

Buffett-Munger

               

Low P/S

               

Low P/B

               

Peter Lynch

               

Walter Schloss

X

X

X

X

X

X

X

X

 

PHY.U

RHR

SBT.UN

SN

GIL

HCG

TGL

G

Benjamin Graham

X

X

X

X

       

Undervalued Predictable

       

X

X

X

 

Buffett-Munger

       

X

X

X

 

Low P/S

             

X

Low P/B

             

X

Peter Lynch

               

Walter Schloss

X

X

X

X

       

The following are the UK/Ireland’s stocks that passed at least three screeners as of Feb. 3, 2014:

Table 3: Stocks Passed At Least Three Screeners - UK/Ireland

     
 

SRP

GRG

ROR

Benjamin Graham

     

Undervalued Predictable

X

X

X

Buffett-Munger

X

 

X

Low P/S

X

 

X

Low P/B

X

X

 

Peter Lynch

X

X

 

Walter Schloss

     

The following are the European stocks that passed at least three screeners as of Feb. 3, 2014:

Table 4: Stocks Passed At Least Three Screeners - Europe

               
 

LTH

SEO

BVXB

WW6

RO4

GL3

UEH

DCO

Exchange

FRA

FRA

FRA

FRA

FRA

FRA

FRA

FRA

Benjamin Graham

               

Undervalued Predictable

X

X

X

X

X

X

X

X

Buffett-Munger

X

X

X

X

X

X

X

X

Low P/S

X

X

X

X

X

     

Low P/B

X

X

     

X

X

 

Peter Lynch

X

X

         

X

Walter Schloss

               
 

JF1

IBM

IBMC

SQE

4B3

WMT

CHUA

 

Exchange

FRA

FRA

XBRU

FRA

FRA

FRA

FRA

 

Benjamin Graham

               

Undervalued Predictable

X

X

X

 

X

X

   

Buffett-Munger

X

X

X

     

X

 

Low P/S

     

X

X

X

X

 

Low P/B

     

X

 

X

X

 

Peter Lynch

X

   

X

X

     

Walter Schloss

 

X

X

         

The following are the Asian stocks that passed at least three screeners as of Feb. 3, 2014:

Table 5: Stocks Passed At Least Three Screeners - Aisa

               
 

600897

600795

00589

600660

000568

600153

02355

00386

Exchange

SHSE

SHSE

HKSE

SHSE

SZSE

SHSE

HKSE

HKSE

Benjamin Graham

               

Undervalued Predictable

X

 

X

X

X

X

X

 

Buffett-Munger

X

X

X

X

 

X

X

X

Low P/S

X

X

X

X

X

X

 

X

Low P/B

X

X

X

X

X

   

X

Peter Lynch

X

X

   

X

 

X

 

Walter Schloss

               
 

600028

600809

600011

600377

00902

00177

   

Exchange

SHSE

SHSE

SHSE

SHSE

HKSE

HKSE

   

Benjamin Graham

               

Undervalued Predictable

               

Buffett-Munger

X

X

           

Low P/S

X

X

X

X

X

X

   

Low P/B

X

 

X

X

X

X

   

Peter Lynch

 

X

X

X

X

X

   

Walter Schloss

               

The following are the Oceania stocks that passed at least two screeners as of Feb. 3, 2014:

Table 6: Stocks Passed At Least Two Screeners - Oceania

         
 

LEI

CTY

HRR

JRL

BRM

CHN

GBP

PPP

Exchange

ASX

ASX

ASX

ASX

NZSE

ASX

ASX

ASX

Benjamin Graham

   

X

X

X

X

X

X

Undervalued Predictable

X

X

           

Buffett-Munger

X

X

           

Low P/S

X

X

           

Low P/B

X

X

           

Peter Lynch

X

             

Walter Schloss

   

X

X

X

X

X

X

 

PPP

SBR

           

Exchange

NZSE

ASX

           

Benjamin Graham

X

X

           

Undervalued Predictable

               

Buffett-Munger

               

Low P/S

               

Low P/B

               

Peter Lynch

               

Walter Schloss

X

X

           

The following is a brief summary of different screeners.

Benjamin Graham Net Current Asset Value Screener

Benjamin Graham defined the net-net value as Cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) - total liabilities. He looked for companies whose market values were less than two-thirds of that net-net value. The rules of the screener are as follows:

  • The stock prices are less than the net current asset value of the companies – Benjamin Graham.
  • During the past 12 months, the companies generated positive operating cash flow.
  • The company has no meaningful debt compared to its cash position.
  • According to Benjamin Graham, some of these companies may well go under as economic conditions worsen; it is important to hold a diversified group of them.

Undervalued Predictable Companies - Discount Cash Flow and Discount Earnings

GuruFocus applied the discounted cash flow and discounted earnings to the top ranked predictable companies, and calculated the intrinsic values of the these companies. These are the companies that appeared to be undervalued. The intrinsic value of the companies is calculated with Future Earnings at Growth Stage + Terminal Value.

Buffett-Munger Screener - Good Companies at Fair or Undervalued Prices

The Buffett-Munger Screener can be used to find companies with high-quality business at undervalued or fair-valued prices:

  • Companies that have high Predictability Rank, that is, companies that can consistently grow their revenue and earnings.
  • Companies that have competitive advantages. They can maintain or even expand its profit margin while growing their business.
  • Companies that incur little debt while growing business.
  • Companies that are fair valued or under-valued. We use PEPG as indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past five years.

Companies at Historical Low Price/Sales Ratios

These companies have been very predictable in their business operations. They are sold at close to historical low price/sales ratios. Their sales and earnings have consistently grown for at least the past decade. However, the price/sales (P/S) ratio of each of these companies is less than 30% above its historical low.

Companies at Historical Low Price/Book Ratios

These are the predictable companies that are sold at close to historical low price/book (P/B) ratios. Their sales and earnings have consistently grown for at least the past decade. However the price/book (P/B) ratios of these companies are less than 30% above their historical lows.

Peter Lynch Screener

  • Companies that have Predictability Rank of at least 2 stars.
  • Companies that have P/E ratio of at most 14.
  • Companies that have 10-year revenue growth rate of at least 6%.

Walter Schloss’s Screener

  • Companies that have Altman Z-Score of at least 2.99. Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations. Altman Z-Score is calculated with this formula: Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5 where

X1 = working capital/total assets,

X2 = retained earnings/total assets,

X3 = earnings before interest and taxes/total assets,

X4 = market value equity/book value of total liabilities,

X5 = sales/total assets.

  • Companies that have interest coverage of at least 10. It is a ratio that measures the burden of the debt a company carries and how easily the company can pay off its debt. It is calculated by dividing a company’s operating income (EBIT) by its interest expense:
  • Companies that have price to tangible book of at most 1.0.
  • Companies that are max 25% above three-year low.

Both Peter Lynch Screener and Walter Schloss Screener can be found through All-in-One Guru Screener. GuruFocus premium membership is needed to access the details of the portfolios and screeners. We also publish a monthly Buffett-Munger newsletter which features the picks from Buffett-Munger Screener. If you are a premium member, you can download this for free. If you are not a Premium Member, we invite you for a 7-day Free Trial.

GuruFocus Global Membership allows you to screen for bargains in Global Markets. We now cover more than 50,000 stocks in 32 countries across five regions. Take a 7-day Free Trial.


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