Rising Book Value and Margin of Safety: GameStop, Steven Madden

10 years of growing BV/S for these undervalued stocks

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Jul 10, 2017
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The following companies have grown their book values per share (BV/S) over the last 10 years.

BV/S is calculated as total equity minus preferred stock, divided by shares outstanding (EOP). Theoretically, it is what shareholders will receive if the company is liquidated. Total equity is a balance sheet item and equal to total assets minus total liabilities. Because the BV/S may not reflect the company’s true value, some investors check the tangible book value to confirm their investment ideas.

The BV/S of GameStop Corp. Class AĂ‚ (GME) has grown by 8% over the last 10 years. The current price-book (P/B) ratio is 0.9, and the price to tangible book value is 69.4.

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According to the discounted cash flow (DCF) calculator, the stock is undervalued and is trading with a margin of safety of 40% at $21.91. The price has been as high as $32.67 and as low as $20.10 in the last 52 weeks. It is currently 34.16% below its 52-week high and above 7.01% its 52-week low. The price-earnings (P/E) ratio is 6.43.

GameStop is an omnichannel video game retailer. It sells new and pre-owned video game hardware, physical and digital video game software and accessories through GameStop, EB Games and Micromania stores.

Ray Dalio (Trades, Portfolio) is the largest shareholder among the gurus with 0.93% of outstanding shares followed by Steven Cohen (Trades, Portfolio) with 0.35%, Ronald Muhlenkamp (Trades, Portfolio) with 0.25%, Joel Greenblatt (Trades, Portfolio) with 0.24%, Chuck Royce (Trades, Portfolio) with 0.09% and David Dreman (Trades, Portfolio) with 0.02%.

The BV/S of BJ's Restaurants Inc. (BJRI) has grown by 6% over the last 10 years. The current P/B ratio is 3.0, and the price to tangible book value is 3.0.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 13% at $36.40. The price has been as high as $47.55 and as low as $32.24 in the last 52 weeks. It is 23.45% below its 52-week high and 12.90% above its 52-week low. The P/E ratio is 19.89.

BJ's Restaurants is involved in the business of owning and operating restaurants.

The company’s largest shareholder among the gurus is Jim Simons (Trades, Portfolio) with 3.7% of outstanding shares followed by Ron Baron (Trades, Portfolio) with 2.32% and Paul Tudor Jones (Trades, Portfolio) with 0.07%.

PRA Group Inc. (PRAA)’s BV/S has grown by 16% over the last 10 years. The current P/B ratio is 1.9, and the price to tangible book value is 4.4.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 15% at $38.00. The price has been as high as $42.70 and as low as $23.15 in the last 52 weeks. It is 11.94% below its 52-week high and 62.42% above its 52-week low. The P/E ratio is 17.25.

PRA Group is a U.S.-based company that primarily acquires, collects and processes nonperforming loans. The company generates the majority of its sales from the U.S.

Jeremy Grantham (Trades, Portfolio) is the largest shareholder among the gurus with 0.16% of outstanding shares.

The BV/S of Steven Madden Ltd. (SHOO) has grown by 17% over the last 10 years. The current P/B ratio is 3.2, and the price to tangible book value is 5.4.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 17% at $39.00. The price has been as high as $40.75 and as low as $32.30 in the last 52 weeks. It is 3.07% below its 52-week high and 22.29% above its 52-week low. The P/E ratio is 19.75.

Steven Madden designs, markets and sells fashion-forward name brand and private label footwear for women, men and children and name brand and private label fashion handbags and accessories.

Royce is the largest shareholder among the gurus with 0.98% of outstanding shares followed by Greenblatt with 0.01%.

Medifast Inc. (MED)’s BV/S has grown by 16% over the last 10 years. The current P/B ratio is 5.0, and the price to tangible book value is 4.9.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 13% at $40.93. The price has been as high as $47.35 and as low as $32.74 in the last 52 weeks. It is 13.39% below its 52-week high and 25.26% above its 52-week low. The P/E ratio is 24.85.

Medifast is engaged in the production, distribution and sales of weight loss and weight management products and other consumable health and diet products. Its products line includes weight loss and management, meal replacement and vitamins.

The company’s largest shareholder among the gurus is Simons with 8% of outstanding shares followed by Caxton Associates (Trades, Portfolio) with 0.09% and Jones with 0.05%.

Novo Nordisk A/S ADRĂ‚ (NVO) has a BV/S ratio that has grown by 7% over the last 10 years. The current P/B ratio is 16.9 and price to tangible book of 18.2.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 34% at $42.01. The price has been as high as $57.41 and as low as $30.89 in the last 52 weeks. It is 26.11% below its 52-week high and 37.33% above its 52-week low. The P/E ratio is 18.01.

Novo Nordisk A/S is a health care company. It is engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. The company's business segments include diabetes and obesity care and biopharmaceuticals.

Simons is the largest shareholder among the gurus with 0.64% of outstanding shares followed by Ken Fisher (Trades, Portfolio) with 0.41% and Tom Gayner (Trades, Portfolio) with 0.04%.

The BV/S of Tractor Supply Co. (TSCO) has grown by 13% over the last 10 years. The current P/B ratio is 4.8 and price to tangible book of 5.3.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 42% at $51.6. The price has been as high as $94.62 and as low as $52.09 in the last 52 weeks. It is 43.99% below its 52-week high and 1.75% above its 52-week low. The P/E ratio is 16.41.

Tractor Supply is an operator of rural lifestyle retail stores in the U.S. It is engaged in supplying the needs of recreational farmers and ranchers as well as tradesmen and small businesses.

David Rolfe (Trades, Portfolio) is the largest shareholder among the gurus with 1.71% of outstanding shares followed by Simons with 1.16%, Columbia Wanger (Trades, Portfolio) with 0.43%, Baron with 0.18%, Greenblatt with 0.16%, Mario Gabelli (Trades, Portfolio) with 0.08%, Pioneer Investments (Trades, Portfolio) with 0.06% and John Rogers (Trades, Portfolio) with 0.05%.

Disclosure: I do not own any shares of any stocks mentioned in this article.