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A Trio of Capital-Intensive Stocks to Consider

Their compelling price-to-tangible-book-value ratios draw the attention of value investors

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Alberto Abaterusso
Jul 19, 2021

Summary

  • Mesa Air Group Inc, Armstrong Flooring Inc and Costamare Inc are outperforming most of their competitors in terms of a more favourable price-to-tangible-book-value ratio
  • The price-to-tangible-book-value ratio is preferred to the price-book ratio with regard to capital intensive companies, as the appraisal of their business mainly derives from tangible assets
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When in search of value opportunities amid capital-intensive businesses, investors may want to consider the three stocks listed below, as their price-to-tangible-book-value ratios are more appealing than their respective industry medians.

The price-to-tangible-book-value ratio is preferred to the price-book ratio for these publicly traded companies, as the appraisal of their business mainly derives from tangible assets.

Mesa Air Group Inc

The first stock that matches the criteria is Mesa Air Group Inc (

MESA, Financial), a Phoenix, Arizona-based regional provider of air carrier services operating 146 aircrafts with more than 370 daily destinations to approximately 102 cities in the U.S. and Mexico.

Mesa Air Group Inc has a price-to-tangible-book-value ratio of 0.66, which is more compelling than the industry median of 1.59 and ranks higher than 82.30% of the 808 competitors that operate in the transportation industry.

The share price was $8.90 per share at close on July 16. The tangible book value per share was approximately $13.54 as of March 31.

The stock has appreciated 141.04% over the past year for a market capitalization of $288.78 million and a 52-week range of $2.80 to $17.40.

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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 overweight and an average target price of $13.20 per share.

Armstrong Flooring Inc

The second stock that meets the criteria is Armstrong Flooring Inc (

AFI, Financial), a Lancaster, Pennsylvania manufacturer of resilient flooring products that are used in the construction and renovation of commercial, residential and institutional buildings in North America and the Pacific Rim.

Armstrong Flooring Inc's price-to-tangible-book-value ratio of 0.50 is more compelling than the industry median of 1.29, and it ranks higher than 88.02% of 1,419 companies that operate in the construction industry.

On July 16, the stock price was $5.38 per share at close, while the tangible book value per share was $10.72 as of the March 2021 quarter.

The stock has risen by 70.20% over the past year for a market capitalization of $112.33 million and a 52-week range of $2.63 to $7.40.

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GuruFocus assigned a score of 4 out of 10 for the financial strength rating and 2 out of 10 for the profitability rating of the company.

On Wall Street, the stock has one recommendation rating of hold with a target price of $3 per share.

Costamare Inc

The third stock that meets the criteria is Costamare Inc (

CMRE, Financial), a Monaco-based owner and charter of container ships operating a fleet of 81 ships with a capacity of about 7,173 twenty-foot equivalent units each and 16 dry bulk vessels with a capacity of about 58,250 deadweight tons each.

Costamare Inc's price-to-tangible-book-value ratio of 0.92 appeals more than the industry median of 1.59, ranking better than 70.2% of 808 companies that operate in the transportation industry.

The stock price was trading at $10.54 per share at close on July 16, while the tangible book value per share was $11.44 as of the first quarter of 2021.

The stock has risen by 105.41% over the past year, determining a market capitalization of $1.20 billion and a 52-week range of $4.48 to $12.68.

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GuruFocus assigned a score of 3 out of 10 for the financial strength rating and 6 out of 10 for the profitability rating of the company.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $13.17 per share.

Disclosure: I have no position in any security mentioned.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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