Value Screeners Identify Opportunities in 2021

As investors continue grappling with the coronavirus pandemic domestically and internationally, the U.S. stock market is still trading close to all-time highs. Even so, the market bull run has not been even accross all sectors. GuruFocus' value screeners have identified a range of investing opportunities for 2021.

U.S. markets head for winning week despite coronavirus surge

During morning trading on Friday, the Dow Jones Industrial Average hit an intraday low of 30,933.53, down 107.6 points from Thursday's close of 31,041.13. Despite this, the 30-stock index is still up over 300 points from the Dec. 31, 2020 close of 30,606.48.

Stocks were pressured as investors monitored a continued surge in coronavirus cases around the globe. According to Johns Hopkins University statistics, global cases topped 87.6 million cases with over 21.4 million cases in the U.S. Additionally, single-day coronavirus casualties in the U.S. hit a record 4,000 on Thursday.

Investors also tracked the December 2020 jobs report. The Bureau of Labor Statistics said total nonfarm payrolls declined 140,000 during the month, reflecting job losses in leisure, hospitality and private education. Jobs declined for the first month since April.

The Dow closed above 31,000 for the first time in history as Congress confirmed at around 3:40 a.m. Eastern Time Thursday morning the election of Joe Biden of the next President of the United States.

GuruFocus Model Portfolios produced gains in 2020

Several of GuruFocus' Model Portfolios outperformed the benchmark in 2020, with the Most Broadly Held and Most Weighted model portfolios returning 24.9% and 23.62%, respectively, compared to the S&P 500 index's return of 16.26%.

Over the past five years, the Most Broadly Held and Buffett-Munger model portfolios returned an annualized 18.05% and 13.37%, respectively, outperforming the S&P 500 benchmark's return of an annualized 13.36% over the same period.

Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) co-mangers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) listed four key criteria of "good companies at fair prices:" understandable business, favorable long-term prospects, honest and competent management and attractive share prices. Table 1 lists the number of Buffett-Munger stocks identified by the GuruFocus Value screen from each region as of Friday:

Table 1

Undervalued Predictable Screener

Like the Buffett-Munger Screener, the Undervalued Predictable Screener also considers stocks with predictable earnings growth and low valuations. However, the Undervalued Predictable Screener seeks stocks that trade below intrinsic value based on the discounted cash flow and discounted earnings models. Table 2 lists the number of undervalued-predictable stocks from each region as of Friday.

Table 2

The Undervalued Predictable Screener returned a cumulative 308.54% since its December 2008 inception despite returning -2.57% during 2020.

Historical Low Price-Book and Historical Low Price-Sales

The Historical Low Price-Book Screener seeks stocks with high business predictability and are trading at price-book ratios less than 30% above the 10-year low. Likewise, the Historical Low Price-Sales Screener seeks stocks with high business predictability and are trading at price-sales ratios less than 30% above the 10-year low. Table 3 lists the number of stocks making these two screens as of Friday.

Table 3

Disclosure: No positions.

Read more here:

• New GuruFocus Model Portfolio: High Quality Low CapEx
• 5 Global Buffett-Munger Stocks With High Dividend Yields
• 6 Stocks Added to Most Weighted Portfolio in 2021

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