When investors search for stocks with a market capitalization of more than $2 billion, but that are trading at less than 1.5 times their book value, they may have a better chance to unearth value stocks.
Thus, value investors may want to consider the following securities, as they meet the above-listed criteria.
Pioneer Natural Resources
The first company that meets the above criteria is Pioneer Natural Resources Co (PXD, Financial). Shares of the Irving, Texas-based independent oil and gas explorer and producer traded at a price of $105.12 per unit at close on March 6 for a market capitalization of $17.42 billion. The price-book ratio of 1.42 is higher than the industry median of 0.76.
The share price has declined by 31% so far this year. Now it trades significantly below the 40-day simple moving average line and stands much lower than the middle point of the 52-week range of $101.9 to $178.22.
GuruFocus assigned a positive rating of 6 out of 10 for the company’s financial strength and a very high rating of 8 out of 10 for its profitability.
Wall Street suggests a buy rating for shares of Pioneer Natural Resources Co with an average price target of $184.76 per share.
Avangrid
The second company that meets the above criteria is Avangrid Inc (AGR, Financial). Shares of the Orange, Connecticut-based operator of a regulated electric company in the United States traded at a price of $51.27 per unit at close on March 6 for a market capitalization of $15.84 billion. The price-book ratio of 1.04 is better than the industry median of 1.51 and beats more than 67% of competitors.
The share price is flat year-over-year, and it is trading below the 40-day simple moving average line. It is below the middle point of the 52-week range of $47.24 to $57.24.
GuruFocus assigned a moderate rating of 4 out of 10 for the company’s financial strength and a good rating of 7 out of 10 for its profitability.
As of March, three sell-side analysts recommend a strong buy, three recommend a buy, two suggest a hold and one suggests an underperforming rating for this stock. The average target price is $49.14 per share.
TransAlta
The third company with the above criteria is TransAlta Corp (TAC, Financial). Shares of the Canadian non-regulated electricity operator in North America and Western Australia traded at a price of $7.46 per unit at close on March 6 for a market capitalization of roughly $2.07 billion. The price-book ratio of 1.39 is slightly higher than the industry median of 1.33.
Year to date, the stock has risen by 4%, but its share price still trades below the 40-day simple moving average line. Currently, the share price trades only a few steps above the middle point of the 52-week range of $5.69 to $8.50.
GuruFocus assigned a low rating of 3 out of 10 for the company’s financial strength but a moderate rating of 5 out of 10 for its profitability.
Wall Street recommends an overweight rating for shares of TransAlta Corp and has established an average price target of $9.01 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- A Trio of High Earnings Yield Stocks for the Value Investor
- 3 Stocks Growing Capex Fast
- 3 Fast-Growing Small Caps
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