Donald Yacktman, a prominent value investor and founder of the AMG Yacktman Fund (Trades, Portfolio), takes the "forward rate of return" into consideration when evaluating 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 3.00% as of the writing of this article.
Companhia Siderurgica Nacional
Companhia Siderurgica Nacional's forward rate of return is 25.64%, which ranks higher than 92% of 454 competitors that operate in the steel industry.
The share price has increased by 148.24% over the past year to close at $7.05 on Monday for a market cap of $9.73 billion. The 52-week range is $2.64 to $10.33. Its price-sales ratio is 1.11 and its price-book ratio is 2.33.
Vanguard Group Inc and Arrowstreet Capital Limited Partnership are among the largest fund holders of the company with 0.48% and 0.26% of shares outstanding, respectively.
The second stock that could appeal to value investors is Qurate Retail (QRTEA, Financial), an Englewood, Colorado-based retailer of various consumer products through live television shopping programs, internet and mobile applications to nearly 220 million households in North America and internationally.
Qurate Retail's forward rate of return is 7.50%, which ranks higher than 54% of 718 companies that operate in the retail-cyclical industry.
The share price has risen by 5.73% over the past year to trade at $11.08 at close on Monday for a market cap of $4.51 billion and a 52-week range of $5.71 to $14.62. Its price-earnings ratio is 3.27 and its price-book ratio is 0.32.
Dodge & Cox is the largest top fund holder of the company with 12.7% of shares outstanding. The asset management firm is followed by Vanguard Group with 8.59% and Ameriprise Financial Group Inc with 4.75%.
Adams Resources & Energy Inc
The third stock that could be of interest to value investors is Adams Resources & Energy Inc (AE, Financial), a Houston, Texas-based oil and gas integrated operator holding marketing, transportation, terminalling and storage activities in the United States.
Adams Resources & Energy Inc's forward rate of return is 12.14%, which ranks higher than 64% of 603 companies that operate in the oil and gas industry.
The share price has climbed 37.77% over the past year to trade at $30.50 at close on Monday for a market cap of $129.85 million and a 52-week range of $18.36 to $37.70. Its price-sales ratio is 0.1 and its price-book ratio is 0.84.
Disclosure: I have no positions in any security mentioned.
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