If you screen the U.S. market for stocks trading below the Graham Number, which is an estimate of intrinsic value, you will have a higher chance to identify bargains, as such stocks are likely to be undervalued.
The Graham Number is calculated as the square root of "earnings per share x book value per share x 22.5"
Chubb Ltd
The first stock that meets the criteria is Chubb Ltd (CB, Financial), a Swiss insurer and reinsurer which provides its financial products globally.
The stock traded at a price of $131.94 per share at close on Wednesday and has a Graham Number of 144.34.
The share price has fallen by 13.7% in the past year, determining a market capitalization of $59.55 billion and a 52-week range of $87.35 to $167.74.
GuruFocus has assigned a score of 4 out of 10 for the company's financial strength and a score of 5 out of 10 for its profitability.
Wall Street sell-side analysts recommend an overweight rating for shares of Chubb Ltd and have produced an average target price of $142.76 per unit.
The company's top fund holder is VANGUARD GROUP INC with 8.55% of shares outstanding, followed by BlackRock Inc. with 7.11% and WELLINGTON MANAGEMENT GROUP LLP with 5.28%.
Citizens Holding Co
The second stock that meets the criteria is Citizens Holding Co (CIZN, Financial), a Philadelphia, Mississippi-based holding company for The Citizens Bank of Philadelphia, a provider of various banking products and services to individuals and businesses.
The stock traded at a price of $22.19 per share at close on Wednesday, which is below the Graham Number of 22.88.
The stock price has risen 4.6% over the past year, fluctuating in a 52-week range of $16.02 to $27.94. The stock has a market capitalization of $124.05 million.
GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and a score of 3 out of 10 for its profitability.
Wall Street sell-side analysts issued a hold recommendation rating for shares of Citizens Holding Co and have set an average target price of $24 per unit.
With 3.3% of shares outstanding, MAGNOLIA CAPITAL ADVISORS LLC is the company's top fund holder, followed by BancorpSouth Bank with 1.5% and KENNEDY CAPITAL MANAGEMENT, INC. with 1.27%.
Foot Locker Inc
The third stock that qualifies is Foot Locker Inc (FL, Financial), a New York-based footwear and accessories company.
The stock traded at a price of $30.97 per share at close on Wednesday, which is below the Graham Number of 31.24.
The stock price has fallen by 24.6% over the past year for a market capitalization of $3.23 billion and a 52-week range of $17.46 to $63.58.
GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and 8 out of 10 for its profitability.
Wall Street sell-side analysts issued an overweight recommendation rating for shares of Foot Locker Inc and have established an average target price of $29.59.
The company's top fund holder is VANGUARD GROUP INC with 9.66% of shares outstanding, followed by BlackRock Inc. with 9.32% and Boston Partners with 8.43%.
Disclosure: I have no positions in any security mentioned in this article.
Read more here:
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- A Trio of Low Shiller Price-Earnings Ratio Stocks
- A Trio of Stocks for the Value Investor
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