To increase the effectiveness of screening for value opportunities, one method is to pick stocks whose "Graham blended multiplier" is less than 22.5. Designed by Benjamin Graham, the father of value investing, the multiplier is equal to the stock's price-earnings ratio multiplied by its price-book ratio.
Thus, value investors may want to consider the following securities, since their Graham blended multipliers are less than 22.5.
Teekay Tankers Ltd
The first stock investors should consider is Teekay Tankers Ltd (TNK, Financial), a Vancouver, Canada-based provider of marine transportation services to oil producers operating in Bermuda and internationally.
The stock has a Graham blended multiplier of 0.63, as the price-earnings ratio is 1.81 (versus the industry median of 13.99) and the price-book ratio is 0.35 (versus the industry median of 1.02).
Teekay Tankers stock traded at $11.93 per share at close on Jan. 13 for a market capitalization of $402.04 million.
The share price has fallen by 46.29% over the past year for a 52-week range of $8.90 to $26.92.
Currently, the company does not pay dividends to its shareholders. The last payment, a quarterly cash dividend of 24 cents per common share, was made in March 2018.
GuruFocus assigned a score of 5 out of 10 to both the company's financial strength and its profitability.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $16.57 per share.
South Plains Financial Inc
The second stock investors should consider is South Plains Financial Inc (SPFI, Financial), a Lubbock, Texas-based regional bank providing banking and financial services to consumers and to small and medium-sized businesses.
The stock has a Graham blended multiplier of 9.2, as the price-earnings ratio is 9.1 (versus the industry median of 11.9) and the price-book ratio is 1.01 (versus the industry median of 0.89).
South Plains Financial stock traded at $19.65 per share at close on Jan. 13 for a market capitalization of $354.86 million.
The share price has fallen by 5.33% over the past year, determining a 52-week range of $11.30 to $22.
The stock offers a trailing 12-month dividend yield of 0.71% and a forward dividend yield of 1.02% as of Dec. 18. The most recent payment, a quarterly cash dividend of 5 cents per common share, was made on Nov. 16.
GuruFocus assigned a rating of 3 out of 10 to the company's financial strength and of 1 out of 10 to its profitability.
On Wall Street, the stock has a median recommendation rating of buy with an average target price of $23.75 per share.
Metropolitan Bank Holding Corp
The third company investors should consider is Metropolitan Bank Holding Corp (MCB, Financial), a New York-based regional bank providing banking and financial services to consumers and to small and medium-sized businesses in the metropolitan area of New York.
The stock has a Graham blended multiplier of 8.72, as the price-earnings ratio is 9.08 (versus the industry median of 11.9) and the price-book ratio is 0.96 (versus the industry median of 0.89).
Metropolitan Bank stock traded at $38.15 per share at close on Jan. 13 for a market capitalization of $316.31 million.
The share price has fallen by 19.65% over the past year for a 52-week range of $15.52 to $51.09.
Metropolitan Bank Holding Corp does not pay dividends.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and of 2 out of 10 to its profitability.
On Wall Street, the stock has a median recommendation rating of buy with an average target price of $48.50 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 2 Underperforming Holdings to Ease Up On
- A Trio of Tech Stocks for the Growth Focused Investor
- 3 High-Yield Stocks for the Dividend Investor
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
