When in search of value opportunities amid equities in capital-intensive businesses, investors may want to look at stocks whose price-to-tangible-book-value ratios are more compelling than their peers.
The price-to-tangible-book-value ratio is preferred to the price-book ratio for these publicly traded equities, as the appraisal of their businesses mainly stems from tangible assets.
Embraer SA
The first stock that meets the criteria is Embraer SA (ERJ, Financial), a São Paulo, Brazil-based designer, manufacturer and seller of aircrafts in Brazil, Latin and North America and internationally.
Embraer SA has a price-to-tangible-book-value ratio of 1.73, which is more compelling than the industry median of 12.80 and ranks higher than 62% of the 212 competitors that operate in the aerospace and defense industry.
The share price was $8.53 per share as of Feb. 17. The tangible book value per share was approximately $4.94 as of the June 2020 quarter.
The stock price decreased by 51.21% over the past year, determining a market capitalization of $1.57 billion and a 52-week range of $3.96 to $18.28.
GuruFocus assigned a score of 3 out of 10 for the financial strength rating and 5 out of 10 for the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of hold.
Nissan Motor Co Ltd
The second stock that makes the cut is Nissan Motor Co Ltd (NSANY, Financial), a Japanese car manufacturer.
Nissan Motor's price-to-tangible-book-value ratio of 0.67 is more appealing than the industry median of 1.69, ranking higher than 83% of 1,071 companies that operate in the vehicles and parts industry.
As of Feb. 17, the stock price was $11.78 per share, while the tangible book value per share was $17.55 as of the December 2020 quarter.
The stock has risen by 28.2% over the past year for a market capitalization of $23.04 billion and a 52-week range of $5.78 to $12.74.
GuruFocus assigned a score of 3 out of 10 for the financial strength rating and 5 out of 10 for the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of buy.
China Shenhua Energy Co Ltd
The third stock that makes the cut is China Shenhua Energy Co Ltd (CSUAY, Financial), a Beijing, China-based corporation that engages in the production and sales of coal and power in China and internationally.
China Shenhua Energy's price-to-tangible-book-value ratio of 0.79 is more compelling than the industry median of 1.28, ranking higher than 59% of 145 companies that operate in the other energy sources industry.
The stock price was trading at $7.49 per share as of Feb. 17, while the tangible book value per share was $9.51 for the September 2020 quarter.
The stock price has risen by nearly 4% over the past year, which has determined a market capitalization of $37.24 billion and a 52-week range of $5.98 to $8.41.
GuruFocus assigned a score of 7 out of 10 for the financial strength rating and 8 out of 10 for the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of buy.
Disclosure: I have no position in any security mentioned.
Read more here:
- 3 Stocks Trading Below the Peter Lynch Earnings Line
- A Trio of Stocks Trading Below Their Earnings Power Values
- A Trio of High Return on Equity Stock Picks to Consider
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