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A Trio of Graham Stocks to Consider

These companies seem to be bargain opportunities

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Alberto Abaterusso
Oct 19, 2021

Summary

  • HSBC Holdings PLC, Markel Corp and Telephone and Data Systems Inc have Graham blended multipliers of less than 22.5.
  • Wall Street is positive likes these stocks
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If you want to have a higher chance to unearth value opportunities, then you may want to look for stocks whose Graham blended multipliers are below 22.5. Created by Benjamin Graham, the father of value investing, the multiplier is equal to the stock's price-earnings ratio multiplied by its price-book ratio.

Therefore, investors may want to consider the following stocks, as they meet the above criteria.

HSBC Holdings PLC

The first stock that makes the cut is HSBC Holdings PLC (

HSBC, Financial), a London-based international bank.

The stock has a Graham blended multiplier of 8.20 as the price-earnings ratio is 13.22 and the price-book ratio is 0.62.

HSBC Holdings PLC traded at $29.66 per share at close on Monday for a market capitalization of $122.31 billion. The stock has risen 49.9% over the past year for a 52-week range of $19.80 to $32.43.

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GuruFocus assigned a rating of 3 out of 10 to the company's financial strength and 4 out of 10 to its profitability.

Currently, the company pays semi-annual dividends, with the most recent one, $0.35 per common share, paid on Sept. 30. The stock offers a forward dividend yield of 3.69% as of Oct. 18.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $35.26 per share.

Markel Corp

The second stock that matches the criteria is Markel Corp (

MKL, Financial), a Glen Allen, Virginia-based financial services company providing coverage through specialty insurance products in North America, the United Kingdom and internationally.

The stock has a Graham blended multiplier of 9.29 as the price-earnings ratio is 6.88 and the price-book ratio is 1.35.

Markel Corp traded at $1,296.90 per share at close on Monday for a market capitalization of approximately $17.86 billion. The stock has risen by 35.8% over the past year, determining a 52-week range of $913.04 to $1,319.45.

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GuruFocus assigned a rating of 4 out of 10 to the company's financial strength and 6 out of 10 to its profitability.

Markel Corp does not pay dividends.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $1,400 per share.

Telephone and Data Systems Inc.

The third company that makes the cut is Telephone and Data Systems Inc. (

TDS, Financial), a Chicago-based telecommunications company.

The stock has a Graham blended multiplier of 6.13 as the price-earnings ratio is 13.33 and the price-book ratio is 0.46.

Telephone and Data Systems Inc traded at $19 per share on Monday, determining a market capitalization of $2.18 billion. The stock has risen by nearly 8% over the past year for a 52-week range of $16.38 to $26.51.

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GuruFocus assigned a rating of 4 out of 10 to the company's financial strength and 5 out of 10 to its profitability.

Currently, the company pays quarterly dividends, with the most recent one, $0.175 per common share, paid on Sept. 30. The stock offers a forward dividend yield of 3.68% as of Oct. 18.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $30.63 per share.

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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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