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A Trio of Stocks With High Forward Rates of Return

Value investors could be interested in these stocks

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Alberto Abaterusso
Jul 25, 2021

Summary

  • Anglogold Ashanti, Credit Acceptance and Toll Brothers are yielding more than double the return of 20-year high-quality market corporate bonds.
  • Donald Yacktman's forward rate of return is calculated as "normalized free cash flow yield plus real growth plus inflation."
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Donald Yacktman, a well-known value investor and founder of the AMG

Yacktman Fund (Trades, Portfolio), takes the "forward rate of return" 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 more than double the return on 20-year high-quality market corporate bonds, which is 3.23% as of the writing of this article.

Anglogold Ashanti

The first stock that could be of interest to investors is Anglogold Ashanti Ltd. (

AU, Financial), a South African gold miner with mineral resources located in South and Continental Africa, the Americas and Oceania.

Anglogold Ashanti's forward rate of return is 15.82%, which ranks higher than 68.26% of 397 competitors that operate in the metals and mining industry.

The share price has decreased by 49.31% over the past year to close at $19.2 on Friday for a market cap of $8.02 billion. The 52-week range is $18.18 to $38.5. Its price-sales ratio is 1.69 and its price-book ratio is 2.15.

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Van Eck Associates is the largest fund holder of the company with 5.15% of shares outstanding. The asset management firm is followed by BlackRock Inc. with 3.65% of shares outstanding and Capital International Investors with 2.02% of shares outstanding.

Credit Acceptance

The second stock value investors could be interested in is Credit Acceptance Corp. (

CACC, Financial), a Southfield, Michigan-based provider of credit services to U.S. independent and franchised automobile dealers.

Credit Acceptance's forward rate of return is 18.23%, which ranks higher than 77.94% of 394 companies that operate in the credit services industry.

The share price has grown by 4.43% over the past year to trade at $476.92 at close on Friday for a market cap of $7.82 billion and a 52-week range of $266.7401 to $539. Its price-earnings ratio is 11.86 and its price-book ratio is 3.36.

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Prescott General Partners LLC is the largest top fund holder of the company with 10.34% of shares outstanding. The asset management firm is followed by

Ruane Cunniff (Trades, Portfolio) with 9.64% and Principal Financial Group Inc. with 6.04%.

Toll Brothers

The third stock that could appeal to investors is Toll Brothers Inc. (

TOL, Financial), a Fort Washington, Pennsylvania-based designer and builder of detached and attached homes in luxury residential communities in several U.S. states.

Toll Brothers' forward rate of return is 23.2%, which ranks higher than 84.71% of 85 companies that operate in the homebuilding and construction industry.

The share price has risen 47.71% over the past year to trade at $57.1 at close on Friday for a market cap of $7.04 billion and a 52-week range of $35.77 to $68.88. Its price-sales ratio is 0.95 and its price-book ratio is 1.43.

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BlackRock Inc. is the leader among the top fund holders of the company with 12.55% of shares outstanding. The asset management firm is followed by Capital World Investors with 12.96% of shares outstanding and Vanguard Group Inc. with 8.17%.

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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.
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