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 (TBK, Financial), 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 (VIV, Financial), 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 (VLO, Financial), 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.
Read more here:
- 3 Net-Net Working Capital Stocks for the Short-Term Investor
- 3 Stocks Trading at a Discount
- 3 Low Shiller Price-Earnings Ratio Picks​
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