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 (2327) 

A Trio of High-Quality Picks for the Value Investor

They have solid balance sheets

September 01, 2020 | About:

Benjamin Graham, the father of value investing, suggested screening the market for stocks that have a current ratio of more than 2 and more working capital than long-term debt.

A current ratio of more than 2 indicates a company can produce sufficient liquidity to pay its short-term creditors. The ratio is calculated by dividing the total current assets by the total current liabilities.

When the working capital stands above the long-term debt by a substantial margin, it means the business can most likely meet all of the long-term obligations. The working capital is the difference between total current assets and total current liabilities.

Thus, investors may want to consider the following stocks, as they meet the above criteria.

Cognex Corp

Cognex Corp (NASDAQ:CGNX) is a Natick, Massachusetts-based provider of machine vision products for manufacturing and distribution industries worldwide.

The stock has a current ratio of 4.47, which is more compelling than the industry median of 1.9.

Cognex Corp has trailing 12-month working capital of about $486.75 million and no long-term debt as of the most recent fiscal year.

GuruFocus assigned a high rating of 8 out of 10 for both the company's financial strength and its profitability.

The stock price traded at $69.19 per share on Monday for a market capitalization of $11.97 billion, a price-book ratio of 8.67 and a 52-week range of $35.20 to $69.50.

Wall Street recommends a hold rating with an average target price of $58.75 per share for this stock.

Expeditors International of Washington Inc

Expeditors International of Washington Inc (NASDAQ:EXPD) is a Seattle, Washington-based provider of logistics services in the U.S. and internationally.

The stock has a current ratio of 2.22, which is more appealing than the industry median of 1.14.

Expeditors International of Washington Inc has trailing 12-month working capital of $1.6 billion and no long-term debt as of the most recent fiscal year.

GuruFocus assigned a very good rating of 7 out of 10 for the company's financial strength and a very high rating of 9 out of 10 for its profitability.

The stock price traded at $88.39 per share at close on Monday for a market capitalization of $14.82 billion, a price-book ratio of 6.83 and a 52-week range of $52.55 to $89.12.

Wall Street recommends a hold rating for the stock with an average target price of $88.39 per share.

NetEase Inc

NetEase Inc (NASDAQ:NTES) is a Chinese provider of various online services, promoting community, information, communication and trade in the Peoples' Republic of China and internationally.

The stock has a current ratio of 2.46, which is more appealing than the industry median of 2.19.

NetEase Inc has trailing 12-month working capital of nearly $6.7 billion and no long-term debt as of the most recent fiscal year.

GuruFocus assigned a very good rating of 7 out of 10 for the company's financial strength and the highest rating of 10 out of 10 for its profitability.

The stock was trading at $487.21 per share at close on Monday for a market capitalization of $62.34 billion, a price-book ratio of 6.09 and a 52-week range of $235.01 to $517.65.

Wall Street recommends a buy rating with an average target price of approximately $542.24 per share for the stock.

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 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

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by Alberto Abaterusso


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh 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)