Donald Yacktman, a well-known 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 three U.S.-listed equities could be of interest to value investors, as their forward rates of return are more than doubling the return on 20-year high quality market (HQM) corporate bonds, which is 3.51% as of the writing of this article.
Logitech International SA
The first stock that could be of interest to investors is Logitech International SA (LOGI, Financial), a Swiss designer of products for connecting through computing, gaming, music, video and other global digital platforms.
Logitech's forward rate of return is 22.81%, which ranks higher than 91% of 1,506 competitors that operate in the hardware industry.
Logitech's share price has risen by 87.04% over the past year to close at $107.10 on Tuesday for a market cap of $18.04 billion. The 52-week range is $53.81 to $120.24. Its price-earnings ratio is 19.29 and its price-book ratio is 7.74.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $128.93 per share.
Credit Suisse AG/ is the largest fund holder of the company with 4.34% of shares outstanding. The Swiss investment bank is followed by Capital World Investors with 2.93% of shares outstanding and Acadian Asset Management LLC with 2.86% of shares outstanding.
Markel Corp
The second stock value investors could be interested in is Markel Corp (MKL, Financial), a Glen Allen, Virginia-based financial services company providing coverage through specialty insurance products in North America, the United Kingdom and internationally.
Markel's forward rate of return is 18.23%, which ranks higher than 62% of 249 peer group companies that operate in the insurance industry.
Markel's share price has climbed by 40.77% over the past year to trade at around $1,210.59 at close on Tuesday for a market cap of $16.66 billion and a 52-week range of $831.33 to $1,250. Its price-earnings ratio is 6.11 and its price-book ratio is 1.33.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $1,317.50 per share.
Vanguard Group Inc is the largest top fund holder of the company, owning 8.94% of shares outstanding. The asset management firm is followed by BlackRock Inc. with 5.99% and Principal Financial Group Inc. with 4.68%.
Arch Capital Group Ltd
The third stock that is attracting investors' attention is Arch Capital Group Ltd (ACGL, Financial), a Bermuda-based global provider of insurance, reinsurance and several other mortgage insurance products.
Arch Capital Group's forward rate of return is 31.72%, which ranks higher than 82% of 249 companies that operate in the insurance industry.
Arch Capital Group's share price has increased by 51.36% over the past year to trade at $40.17 at close on Tuesday for a market cap of $16.21 billion and a 52-week range of $23.68 to $41.28. Its price-earnings ratio is 9.89 and its price-book ratio is 1.32.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $47.89 per share.
Artisan Partners Limited Partnership is the leader among the top fund holders of the company with 8.84% of shares outstanding. The asset management firm is followed by Vanguard Group with 8.67% of shares outstanding and BlackRock with 5.93% of shares outstanding.
Disclosure: I have no position in any security mentioned.
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