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Alberto Abaterusso
Alberto Abaterusso
Articles (2604) 

3 Stocks Trading Below the Graham Number

They could represent potential bargain opportunities

September 08, 2020 | About:

If you pick U.S. stocks that are trading below the Graham Number, which is an estimate of intrinsic value, you could have a higher likelihood 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"

Triumph Bancorp Inc

The first stock that qualifies is Triumph Bancorp Inc (NASDAQ:TBK), a Dallas, Texas-based financial holder of TBK Bank, SSB, which is a regional bank that serves retail customers and small-to-mid-sized businesses.

The stock was trading at a price of $29.84 per share at close on Friday and has a Graham Number of 36.95.

The stock price has fallen by 4.2% over the past year, determining a market capitalization of $741.57 million and fluctuating in a 52-week range of $19.03 to $43.15.

GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and a score of 4 out of 10 for its profitability.

Wall Street recommends an overweight rating with an average price target of $29.42 per share of Triumph Bancorp Inc.

With 13.30% of shares outstanding, BlackRock Inc. is the company's top fund holder, followed by WELLINGTON MANAGEMENT GROUP LLP with 9.64% and VANGUARD GROUP INC with 5.87%.

Telefonica Brasil SA

The second stock that meets the criteria is Telefonica Brasil SA (NYSE:VIV), a Brazilian telecommunication services company.

The stock traded at a price of $9.16 per American Depository Receipt (ADR) at close on Friday, which is below the Graham Number of 11.15.

The stock price has fallen by 29.3% over the past year, which determined a market capitalization of $15.47 billion and a 52-week range of $7.75 to $14.68.

GuruFocus has assigned a score of 6 out of 10 for the company's financial strength and a score of 7 out of 10 for its profitability.

Wall Street recommends an overweight rating with an average target price of $11.82 per ADR of Telefonica Brasil SA.

The company's top fund holder is Artisan Partners Limited Partnership with 4.83% of shares outstanding, followed by VANGUARD GROUP INC with 0.25% and ARROWSTREET CAPITAL LIMITED PARTNERSHIP with 0.21%.

Valero Energy Corp

The third stock that has the criteria is Valero Energy Corp (NYSE:VLO), a San Antonio, Texas-based independent oil and ethanol operator with production and refinery plants in North America, the UK, Ireland and several other geographic regions.

The stock traded at a price of $51.22 per share at close on Friday, which is below the Graham Number of 64.57.

The share price has fallen by 35.5% in the past year, determining a market capitalization of $20.89 billion and a 52-week range of $31 to $101.99.

GuruFocus has assigned a score of 6 out of 10 for both the company's financial strength and profitability.

The company's top fund holder is VANGUARD GROUP INC with 8.62% of shares outstanding, followed by BlackRock Inc. with 8.17% and STATE STREET CORP with 6.01%.

Disclosure: I have no positions in any security mentioned in this article.

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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

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