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5 Buffett-Munger Stocks Trading at Attractive GF Values

Berkshire Hathaway makes the list of good stocks trading at fair prices

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James Li
Sep 22, 2021

Summary

  • Buffett and Munger seek good stocks trading at fair prices using a few key criteria.
  • Investors can find opportunities in stocks that are also trading at attractive GF Values.
  • Berkshire Hathaway is among the stocks listed in the Buffett-Munger Screener.
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According to the Buffett-Munger Screener, one of several predefined screens available to GuruFocus Premium members, five stocks with good business fundamentals and are trading at attractive GF Values are Berkshire Hathaway Inc. (

BRK.A, Financial)(BRK.B, Financial), Usana Health Sciences Inc. (USNA, Financial), La-Z-Boy Inc. (LZB, Financial), Credit Acceptance Corp. (CACC, Financial) and Allstate Corp. (ALL, Financial).

Berkshire co-mangers

Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) look for good companies trading at fair prices using a four-criterion investing approach: understandable business, favorable long-term prospects, shareholder-oriented management and attractive share price. Key characteristics of Buffet-Munger companies include high business predictability, strong profit margin growth, no meaningful debt and low price-earnings-to-growth ratios.

According to the Model Portfolio pages, GuruFocus’ Buffett-Munger strategy has returned a cumulative 361.71% since its inception in 2009, with an annualized return of 12% over the past 10 years and 27.91% over the past year.

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GuruFocus’ exclusive valuation method provides an alternative way to measure a stock’s intrinsic valuation. Patterned from legendary Fidelity Magellan Fund manager Peter Lynch’s earnings line, the GF Value considers several historical price multiples and adjusts for past performance and future growth estimates.

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Berkshire Hathaway

Class B shares of Berkshire (

BRK.B, Financial) traded around $276.14, showing that the stock is modestly undervalued based on Wednesday’s price-to-GF Value ratio of 0.87.

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GuruFocus ranks Buffett’s Omaha, Nebraska-based insurance conglomerate’s profitability 7 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8 and net profit margins and returns outperform more than 89% of global competitors.

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Gurus with holdings in Berkshire’s Class B shares include

Bill Gates (Trades, Portfolio)’ foundation trust and Diamond Hill Capital (Trades, Portfolio).

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Usana Health Sciences

Shares of Usana Health Sciences (

USNA, Financial) traded around $89.20, showing that the stock is modestly undervalued based on Wednesday’s price-to-GF Value ratio of 0.87.

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GuruFocus ranks the Salt Lake City-based company’s financial strength and profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8, a strong Altman Z-score of 10 and an operating margin that has increased approximately 0.8% per year on average over the past five years and is outperforming more than 84% of global competitors.

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Gurus with holdings in Usana include

Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.

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La-Z-Boy

Shares of La-Z-Boy (

LZB, Financial) traded around $33.88, showing that the stock is modestly undervalued based on Wednesday’s price-to-GF Value ratio of 0.89.

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GuruFocus ranks the Monroe, Michigan-based furniture retailer’s profitability 8 out of 10 on several positive investing signs, which include a 4.5-star predictability rank and a high Piotroski F-score of 7.

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Credit Acceptance

Shares of Credit Acceptance (

CACC, Financial) traded around $603.77, showing the stock is fairly valued based on Wednesday’s price-to-GF Value ratio of 0.99.

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GuruFocus ranks the Southfield, Michigan-based consumer finance company’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 9, a 4.5-star business predictability rank and profit margins and returns that outperform more than 84% of global competitors.

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Allstate

Shares of Allstate (

ALL, Financial) traded around $130.84, showing the stock is fairly valued based on Wednesday’s price-to-GF Value ratio of 0.99.

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GuruFocus ranks the Northbrook, Illinois-based insurance company’s profitability 6 out of 10 on the back of a 4.5-star business predictability rank and returns that outperform more than 67% of global competitors.

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Disclosures

I am/we are Long USNA
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