>
  1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Alberto Abaterusso
Alberto Abaterusso
Articles (2618) 

3 Reasonably-Priced Stocks

Their Graham Blended Multiplier is less than 22.5

January 23, 2020 | About:

Benjamin Graham, the father of value investing, co-author with David Dodd of "Security Analysis" and author of "The Intelligent Investor," recommended searching for stocks whose price-earnings ratio multiplied by the price-book ratio yields less than 22.5. Why? Because these stocks are likely trading at discount to their intrinsic value.

The value investor may, therefore, want to consider the following three stocks, as their Graham Blended Multiplier is below 22.5.

1st Constitution Bancorp

The first company that displays the screening criteria is 1st Constitution Bancorp (NASDAQ:FCCY), a Cranbury, New Jersey-based holding of 1st Constitution Bank which operates in the central, coastal and northeastern areas of New Jersey.

Shares of the U.S. regional bank were trading at a price of $21.74 per unit at close on Jan. 22 for a market capitalization of $221.57 million.

The stock has a Graham blended multiplier of 18.71, as the price-earnings ratio is 13.76 and the price-book ratio is 1.36. The regional banks industry has a median of 12.0 for the price-earnings ratio and a median of 1.07 for the price-book ratio.

In the past year through Jan. 22, the share price rose 11% to above the 200-, 100- and 50-day simple moving average lines.

The 52-week range is $16.47 to $22.91.

The company is currently paying a quarterly cash dividend of 7.5 cents per common share. The dividend yield is 1.38% versus the industry median of 3% as of Jan. 22. This stock has been paying dividends for about four years.

Wall Street issued an overweight recommendation rating for shares of 1st Constitution Bancorp, which means that this stock is foreseen to outperform within a year, and has established an average target share price of $23.

Xerox

The second company that displays the screening criteria is Xerox Holdings Corporation (NYSE:XRX).

Shares of the Norwalk, Connecticut-based designer, developer and seller of document management systems and solutions closed at a price of $36.32 per unit on Jan. 22 for a market capitalization of $7.85 billion.

The stock has a Graham blended multiplier of 21.12, as the price-earnings ratio is 12.8 and the price-book ratio is 1.65. The information technology services industry has a median of 27.02 for the price-earnings ratio and of 3.03 for the price-book ratio.

In the past year through Jan. 22, the share price grew 54% to trade above the 200- and 100-day simple moving average line. The share price is still below the 50-day SMA line.

The 52-week share price range is $23.17 to $39.47.

The company is currently paying a quarterly cash dividend of 25 cents per common share. The dividend yield is 2.76% versus the industry median of 1.43% as of Jan. 22. Xerox Holdings Corporation has been paying dividends for approximately 35 years.

Wall Street issued a hold recommendation rating for this stock and has established an average target share price of $42.67.

Cullen/Frost

The third company that displays the screening criteria is Cullen/Frost Bankers Inc (NYSE:CFR).

Shares of the San Antonio, Texas-based holding of Frost Bank closed at $95.00 on Jan. 22 for a market capitalization of $5.94 billion.

The stock has a Graham blended multiplier of 21.40, as the price-earnings ratio is 13.46 and the price-book ratio is 1.59. The industry of regional banks has a median of 12.0 for the price-earnings ratio and of 1.07 for the price-book ratio.

In the past year through Jan. 22, the share price fell 4% to below the 50-day simple moving average lines. The share price is still above the 200- and 100-day SMA lines.

The 52-week range is $79.86 to $106.23.

Currently, the company is paying a quarterly cash dividend of 71 cents per common share. The dividend yield is 2.95% versus the industry median of 3% as of Jan. 22. The bank has been paying dividends for about three decades.

Wall Street issued a hold recommendation rating for this stock and has established an average target share price of $92.45.

Disclosure: I have no positions in any securities mentioned.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here

About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by Alberto Abaterusso


User Generated Screeners


pjmason14Momentum
wigbertHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)