Benjamin Graham, the pioneer of value investing and author of "The Intelligent Investor," recommended stocks whose "Graham blended multiplier" stood below 22.5. The Graham blended multiplier is the price-earnings ratio multiplied by the price-book ratio. Such stocks could be trading at a discount to their intrinsic value, increasing the likelihood of value opportunities.
Thus, value investors may be interested in the following three stocks, as their Graham blended multipliers stand below 22.5.
Acadia Realty Trust
The first stock investors may be interested in is Acadia Realty Trust (AKR, Financial), a Rye, New York-based equity real estate investment trust company, which follows a long-term, profitable, growth-oriented investment strategy.
The stock has a Graham blended multiplier of 17.2 as the price-earnings ratio is 24.71 (versus the industry median of 17.77) and the price-book ratio is 0.7 (versus the industry median of 0.93).
Acadia Realty Trust's stock was trading at $11.86 per share at close on Sept. 18 for a market capitalization of $1.02 billion.
The share price has declined by 58.4% over the past year, determining a 52-week range of $9.59 to $29.55.
The distribution of a quarterly cash dividend of 24 cents per common share has been temporarily suspended by the board of trustees of the company. The most recent quarterly payment took place on April 15, for a trailing 12-month dividend yield of 7.25% as of Sept. 18.
GuruFocus assigned a low score of 3 out of 10 to the company's financial strength and a very good score of 7 out of 10 to its profitability.
Wall Street sell-side analysts recommend a hold rating and have established an average target price of $13.92 per share.
Capitol Federal Financial
The second stock investors may be interested in is Capitol Federal Financial Inc. (CFFN, Financial), a Topeka, Kansas-based regional bank.
The stock has a Graham blended multiplier of 19.13 as the price-earnings ratio is 18.94 (versus the industry median of 9.7) and the price-book ratio is 1.01 (versus the industry median of 0.74).
Capitol Federal Financial's stock was trading at $9.28 per share at close on Sept. 18, determining a market capitalization of $1.31 billion.
The share price has fallen by nearly 34% over the past year, and the 52-week range is $9.17 to $14.57.
The stock grants trailing 12-month and forward dividend yields of 3.66% as of Sept. 18.
GuruFocus assigned a low rating of 3 out of 10 to the company's financial strength and a moderate rating of 4 out of 10 to its profitability.
Wall Street sell-side analysts recommend an overweight rating and have set an average target price of $12.33 per share.
Arcosa
The third company investors could be interested in is Arcosa Inc. (ACA, Financial), a Dallas-based provider of infrastructure-related solutions to the North American construction, energy and transportation industries.
The stock has a Graham blended multiplier of 22.23 as the price-earnings ratio is 18.68 (versus the industry median of 13.83) and the price-book ratio is 1.19 (versus the industry median of 1.02).
Arcosa was trading at $45.4 per share at close on Sept. 18 for a market capitalization of $2.19 billion.
The share price has increased by approximately 32% over the past year for a 52-week range of $28.14 to $48.64.
GuruFocus assigned a very good score of 7 out of 10 to the company's financial strength rating and a moderate score of 4 out of 10 to its profitability rating.
Wall Street sell-side analysts recommend a buy rating and have produced an average target price of $51.80 per share.
Disclosure: I have no positions in any securities mentioned.
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