When looking for value opportunities among 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 evaluation of their business mainly derives from tangible assets.
Dongfeng Motor Group Co Ltd
The first stock that matches the criteria is Dongfeng Motor Group Co Ltd (DNFGY, Financial), a Wuhan, People’s Republic of China-based manufacturer of passenger and commercial vehicles as well as engines and components in mainland China.
Dongfeng Motor Group has a price-to-tangible-book-value ratio of 0.39, which is more appealing than the industry median of 1.87 and ranks higher than 94.25% of the 1,096 competitors that operate in the vehicles and parts industry.
The share price was approximately $45.10 per share at close on Aug. 24. The tangible book value per share was approximately $114.40 as of Dec. 30.
The stock has risen by 26.33% over the past year for a market capitalization of $7.76 billion and a 52-week range of $30.06 to $63.72.
GuruFocus assigned a score of 5 out of 10 for both the financial strength rating and the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $8.39 per share.
Alliance Resource Partners LP
The second stock that meets the criteria is Alliance Resource Partners LP (ARLP, Financial), a Tulsa, Oklahoma-based thermal coal producer which supplies utilities and industrial users in the United States. The company holds nearly 1.7 billion tons of coal which are stored in proven and probable reserves located in Illinois, Indiana, Kentucky, Maryland, Pennsylvania and West Virginia.
Alliance Resource Partners LP's price-to-tangible-book-value ratio of 0.92 is more appealing than the industry median of 1.67, and it ranks higher than 71.13% of 142 companies that operate in the other energy sources industry.
The stock price was approximately $8.10 per share at close on Aug. 24, while the tangible book value per share was $8.80 as of the June 2021 quarter.
The stock has risen by 144.41% over the past year for a market capitalization of $1.03 billion and a 52-week range of $2.63 to $8.39.
GuruFocus assigned a score of 4 out of 10 for the financial strength rating and 7 out of 10 for the profitability rating of the company.
On Wall Street, the stock has one recommendation rating of buy with a target price of $9 per share.
Air Lease Corporation
The third stock that meets the criteria is Air Lease Corporation (AL, Financial), a Los Angeles-based aircraft leasing company owning a total fleet of 664 aircrafts.
Air Lease Corporation's price-to-tangible-book-value ratio of 0.72 appeals more than the industry median of 2.5, ranking better than 86.85% of 829 companies that provide business services to the transportation sector.
The stock price was trading at $40.95 per share at close on Aug. 24, while the tangible book value per share was $56.96 as of the June 2021 quarter.
The stock has climbed almost 36% over the past year, determining a market capitalization of $4.65 billion and a 52-week range of $26.65 to $52.96.
GuruFocus assigned a score of 3 out of 10 for the financial strength rating and 7 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 $54.75 per share.
Disclosure: I have no position in any security mentioned.
