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Alberto Abaterusso
Alberto Abaterusso
Articles (2149) 

3 Graham-Style Stocks to Consider

Their Graham blended multipliers are below 22.5

May 04, 2020 | About:

To enhance the search for value opportunities, investors may want to consider stocks whose "Graham blended multiplier” is 22.5 or less. Developed by Benjaming Graham, the father of value investing, the multiplier equals the stock’s price-earnings ratio times its price-book ratio.

Thus, value investors may want to have a look at the following three stocks, as their Graham blended multipliers 22.5 or less.

Adtalem Global Education Inc

The first stock to have a look at is Adtalem Global Education Inc (NYSE:ATGE), a Chicago-based provider of educational services.

Shares of Adtalem Global Education closed at a price of $31.63 per unit on May 1 for a market capitalization of $1.67 billion.

The stock has a Graham blended multiplier of 21.94, as the price-earnings ratio is 17.01 and the price-book ratio is 1.29. The industry has a median of 16.08 for the price-earnings ratio and a median of 1.63 for the price-book ratio.

The stock trades reasonably, as its share price is close to the Peter Lynch earnings line.

The 52-week range is $19.76 to $51.79.

Wall Street sell-side analysts issued an overweight recommendation rating for this stock and have set an average target price of $40.25 per share.

Hub Group Inc

The second stock to have a look at is Hub Group Inc (NASDAQ:HUBG), an Oak Brook, Illinois-based provider of truck transportation and brokerage services in the United States and Canada.

Shares of Hub Group closed at a price of $42.47 per unit on May 1 for a market capitalization of $1.44 billion.

The stock has a Graham blended multiplier of 17.78, as the price-earnings ratio is 13.27 and the price-book ratio is 1.34. The industry has a median of 11.93 for the price-earnings ratio and of 0.86 for the price-book ratio.

The stock is priced reasonably, as its share price trades underneath the Peter Lynch earnings line.

The 52-week range is $36.51 to $60.42.

Wall Street sell-side analysts issued an overweight recommendation rating for this stock and have established an average target price of $50.77 per share.

Mobile Mini Inc

The third company that meets the above-listed criteria is Mobile Mini Inc (NASDAQ:MINI), a Phoenix, Arizona-based provider of portable storage and specific containment solutions in North America and the United Kingdom.

Shares of Mobile Mini closed at a price of $26.68 per unit on May 1 for a market capitalization of $1.18 billion.

The stock has a Graham blended multiplier of 19.87, as the price-earnings ratio is 14.19 and the price-book ratio is 1.4. The industry has a median of 13.18 for the price-earnings ratio and of 1.39 for the price-book ratio.

The Peter Lynch shows that the stock is reasonably priced, as its share price is trading close to the earnings line.

The 52-week range is $18.41 to $45.75. The stock grants a dividend yield of 4.23%.

Wall Street sell-side analysts issued an overweight recommendation rating for this stock and have established an average target price of $32.60 per share.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about gold, silver and precious metals mining industries. 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

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