5 Cheap Stocks With Growing Book Values

Infosys, GameStop with margins of safety and rising book value per share

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Dec 11, 2017
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According to GuruFocus’ All-In-One Screener, the following companies have grown their book values per share (BV/S) over the past decade.

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. Since 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 Infosys Ltd. ADR (INFY) has grown by 19% over the past 10 years. The price-book (P/B) ratio is 3.3, and the price to tangible book value is 3.5.

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The company is engaged in the information technology services. It has a market cap of $35.07 billion.

According to the discounted cash flow (DCF) calculator, the stock is undervalued and is trading with a margin of safety of 13% at $15.68. The stock price has been as high as $16.15 and as low as $13.42 in the past 52 weeks. It is 2.88% below its 52-week high and above 16.84% its 52-week low. The price-earnings (P/E) ratio is 16.64.

Ken Fisher (Trades, Portfolio) is the largest shareholders among the gurus with 0.98% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.46%, Donald Yacktman (Trades, Portfolio) with 0.26% and Yacktman Fund (Trades, Portfolio) with 0.12%.

GameStop Corp Class A (GME)’s BV/S has grown by 8% over the past decade. The P/B ratio is 0.8, and the price to tangible book value is 31.

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The multichannel video game retailer has a market cap of $1.95 billion.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 47% at $19.2 The stock price has been as high as $26.84 and as low as $15.85 in the past 52 weeks. It is 28.46% below its 52-week high and 21.14% above its 52-week low. The P/E ratio is 5.64.

The company’s largest shareholder among the gurus is Ray Dalio (Trades, Portfolio) with 1.27% of outstanding shares followed by Ronald Muhlenkamp (Trades, Portfolio) with 0.25% and Steven Cohen (Trades, Portfolio) with 0.11%.

The BV/S of Gentex Corp. (GNTX) has grown by 11% over the past 10 years. The P/B ratio is 2.9, and the price to tangible book value is 4.2.

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The company manufactures automatic-dimming rearview mirrors and electronics for the automotive industry. It has a market cap of $5.8 billion.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 27% at $20.44. The stock price has been as high as $22.12 and as low as $16.59 in the past 52 weeks. It is 7.59% below its 52-week high and 23.21% above its 52-week low. The P/E ratio is 16.30.

Chuck Royce (Trades, Portfolio) is the largest shareholder of the company among the gurus with 1.62% of outstanding shares followed by Columbia Wanger (Trades, Portfolio) with 0.43%, Paul Singer (Trades, Portfolio) with 0.18% and Joel Greenblatt (Trades, Portfolio) with 0.18%.

Waddell & Reed Financial Inc. Class A (WDR)’s BV/S has grown 13% over the past decade. The P/B ratio is 2.0 and price to tangible book of 2.5.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 17% at $21.62. The stock price has been as high as $22.45 and as low as $16.11 in the past 52 weeks. It is 3.70% below its 52-week high and 34.20% above its 52-week low. The P/E ratio is 15.62.

Fisher is the largest shareholder among the gurus with 2.31% of outstanding shares followed by Mario Gabelli (Trades, Portfolio) with 2.08%; and Barrow, Hanley, Mewhinney & Strauss with 0.3%.

The BV/S of LKQ Corp. (LKQ) has grown 18% over the past 10 years. The P/B ratio is 3.1, and the price to tangible book value is 268.1.

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The company provides alternative and mechanical replacement products. It has a market cap of $12.43 billion.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 14% at $40.22. The stock price has been as high as $40.26 and as low as $27.85 in the past 52 weeks. It is 0.10% below its 52-week high and 44.42. The P/E ratio is 25.10.

The company’s largest guru shareholder is Chuck Akre (Trades, Portfolio) with 1.02% of outstanding shares followed by Columbia Wanger (Trades, Portfolio) with 0.36% and Greenblatt with 0.18%.

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