If you want to have a higher chance to discover 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, value investors could be interested in the following stocks, as they meet the above criteria and are favored by Wall Street analysts.
General Motors Co
The first stock that makes the cut is General Motors Co (GM, Financial), a Detroit-based automaker.
The stock has a Graham blended multiplier of 15.15 as the price-earnings ratio is 8.56 and the price-book ratio is 1.77.
General Motors Co traded at $64.06 per share at close on Monday for a market capitalization of $93.01 billion. The stock has risen 38% over the past year for a 52-week range of $40.04 to $65.18.
GuruFocus assigned a rating of 4 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Currently, the company is not paying dividends. The last distribution, a quarterly $0.38 per common share, was made in March of 2020.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $74.47 per share.
Arch Capital Group Ltd
The second stock that matches the criteria is Arch Capital Group Ltd (ACGL, Financial), a Bermuda-based global provider of insurance, reinsurance and several other mortgage insurance products.
The stock has a Graham blended multiplier of 11.56 as the price-earnings ratio is 8.69 and the price-book ratio is 1.33.
Arch Capital Group Ltd traded at $43.11 per share at close on Monday for a market capitalization of approximately $16.65 billion. The stock has risen by 24.78% over the past year, determining a 52-week range of $31.23 to $43.72.
GuruFocus assigned a rating of 4 out of 10 to the company's financial strength and 7 out of 10 to its profitability.
Arch Capital Group Ltd does not pay dividends.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $49.83 per share.
Banner Corp
The third company that makes the cut is Banner Corp (BANR, Financial) a Walla Walla, Washington-based regional bank providing commercial banking and financial products and services to individuals, businesses and public organizations across Washington, Oregon, California, Idaho and Utah.
The stock has a Graham blended multiplier of 14.47 as the price-earnings ratio is 11.39 and the price-book ratio is 1.27.
Banner Corp traded at $61.87 per share at close on Monday, determining a market capitalization of $2.15 billion. The stock has risen by 36.37% over the past year for a 52-week range of $41.12 to $63.24.
GuruFocus assigned a rating of 3 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, $0.41 per common share, paid on Nov. 12. The stock offers a forward dividend yield of 2.63% as of Nov. 22.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $66 per share.
