3 High-Return Stock Picks

Their forward rates of return are more than twice the 20-year high quality market corporate bonds

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Feb 24, 2021
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Donald Yacktman, a prominent value investor and founder of the AMG

Yacktman Fund (Trades, Portfolio) Class I (YACKX), takes the "forward rate of return" highly into consideration when assessing the attractiveness of a stock. He calculates this valuation ratio as "normalized free cash flow yield plus real growth plus inflation."

The following U.S.-listed equities may draw the attention of value investors, as their forward rates of return are more than twice the return on 20-year high-quality market (HQM) corporate bonds, which stands at 2.99% as of the writing of this article.

Oshkosh Corp

The first stock value investors could be interested in is Oshkosh Corp (

OSK, Financial), an Oshkosh, Wisconsin-based designer, builder and seller of specialty vehicles and vehicle bodies.

Oshkosh's forward rate of return is 19.64%, which ranks higher than 80% of 143 companies that operate in the farm and heavy construction machinery industry.

Oshkosh's share price added nearly 43% over the past year to close at $109.62 on Tuesday for a market cap of $7.50 billion. The 52-week range is $46.72 to $119.75. Its price-earnings ratio is 23.68 and its price-book ratio is 2.57.

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On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $112.19 per share.

BlackRock Inc. is the largest fund holder of the company, holding 9.55% of shares outstanding. The asset management company is followed by Vanguard Group Inc with 9.05% of shares outstanding and FMR LLC with 6.38% of shares outstanding.

Trinet Group Inc

The second stock value investors could consider is Trinet Group Inc (

TNET, Financial), a Dublin, California-based provider of staffing and employment services to small and midsize companies in North America.

Trinet Group Inc's forward rate of return is 25.38%, which ranks higher than 89% of 640 companies that operate in the business services industry.

Trinet Group Inc's share price increased by 49.64% over the past year to trade at $83.83 at close on Tuesday for a market cap of $5.53 billion and a 52-week range of $27.79 to $85.36. Its price-earnings ratio is 21.06 and its price-book ratio is 8.98.

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On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $88.50 per share.

Amid the top fund holders of the company, Atairos Group, Inc. is the leader with 32.19% of shares outstanding. It is followed by Wellington Management Group LLP with 8.93% of shares outstanding and Vanguard Group Inc with 6.28% of shares outstanding.

Graphic Packaging Holding Co

The third stock value investors may want to consider is Graphic Packaging Holding Co (

GPK, Financial), an Atlanta, Georgia-based provider of packaging and containers solutions primarily for the food and beverage industry.

Graphic Packaging Holding Co's forward rate of return is 7.12%, which ranks higher than 46% of 267 companies that operate in the packaging and containers industry.

Graphic Packaging Holding Co's share price has gained 17.62% over the past year to trade at around $16.02 at close on Tuesday for a market cap of $4.29 billion and a 52-week range of $10.41 to $18.22. Its price-earnings ratio is 25.84 and its price-book ratio is 3.04.

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On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $19.20 per share.

With 8.87% of shares outstanding, Vanguard Group Inc is the leader among the top fund holders of the company. It is followed by Fuller & Thaler Asset Management, Inc. with 5.16% of shares outstanding and BlackRock Inc. with 5.07% of shares outstanding.

Disclosure: I have no position in any security mentioned.

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