Benjamin Graham, the pioneer of value investing, suggested looking for securities which have a Graham blended multiplier (price-earnings ratio multiplied by price-book ratio) of less than 22.5, as stocks that meet this criteria are likely trading at a discount to their intrinsic value.
The following stocks have a Graham blended multiplier of less than 22.5 and have been assigned positive ratings from analysts on Wall Street.
Ameris Bancorp
The first company under consideration is Ameris Bancorp (ABCB, Financial).
Shares of the Moultrie, Georgia-based regional bank closed at $43.12 per unit on Thursday for a market capitalization of $3 billion.
The stock has a Graham blended multiplier of 18.56, as the price-earnings ratio is 14.97 and the price-book ratio is 1.24. The banks industry has a median of 12.06 for the price-earnings ratio and of 1.08 for the price-book ratio.
Wall Street issued a buy recommendation rating for Ameris Bancorp and has established an average target price of $47.92.
Over the past year through Dec. 26, the share price has increased 37% to above the 200- and 100-day simple moving average lines. It is still below the 50-day SMA line.
The 52-week share price range is $29.97 to $44.9. The dividend yield is 1.04% versus the industry median of 2.96% as of Dec. 26. The company is currently paying a cash quarterly dividend of 15 cents per common share. Ameris Bancorp has paid dividends for more than 20 years.
The 14-day relative strength index of 46 suggests the stock is neither overbought nor oversold.
Minerals Technologies
The second company under consideration is Minerals Technologies Inc. (MTX, Financial).
Shares of the New York-based producer and marketer of a broad range of specialty mineral, mineral-based and synthetic mineral products closed at $57.64 each on Thursday for a market capitalization of $2.01 billion.
The stock has a Graham blended multiplier of 19.76, as the price-earnings ratio is 13.82 and the price-book ratio is 1.43. The chemicals industry has a median of 17.01 for the price-earnings ratio and of 1.37 for the price-book ratio.
Minerals Technologies’ price-earnings ratio is ranked higher than 59.87% of competitors operating in the chemicals industry and its price-book ratio is ranked higher than 47.3% of competitors.
Wall Street issued an overweight recommendation rating and has set an average target price of $61.00.
Over the past year through Dec. 26, the share price has risen 14% and is above the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $45.26 to $63.75. The company paid a quarterly cash dividend of 5 cents per common share on Dec. 12 this year, generating a 0.35% forward and trailing 12-month dividend yield as of Dec. 26. Minerals Technologies has paid dividends for over 25 years.
The 14-day relative strength index of 63 suggests the stock is neither overbought nor oversold.
FUJIFILM Holdings
The third company to have a look at is FUJIFILM Holdings Corporation (FUJIY, Financial).
Shares of the Japanese producer and seller of photo and electronic imaging solutions closed at $47.84 on Thursday for a market capitalization of $19.58 billion.
The stock has a Graham blended multiplier of 16.95, as the price-earnings ratio is 16.14 and the price-book ratio is 1.05. The business equipment and supplies industry has a median of 18.11 for the price-earnings ratio and a median of 1.52 for the price-book ratio.
FUJIFILM beats 54.40% of industry competitors in terms of a better price-earnings ratio. It also beats 65.37% of competitors in terms of a better price-book ratio.
Wall Street issued a buy recommendation rating for FUJIFILM and has established an average target price per share of $54.83.
Over the past year through Dec. 26, the share price has risen 23% to above the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $36.53 to $51.63. The dividend yield is 1.68% versus the industry median of 1.97% as of Dec. 26. The company paid a semi-annual cash dividend of 43.4 cents per common share to its shareholders on Dec. 17 this year. FUJIFILM Holdings has paid dividends for 34 years.
The 14-day relative strength index of 51 indicates the stock is neither overbought nor oversold.
Disclosure: I have no positions in any securities mentioned.
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