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A Trio of Graham Stocks to Consider

These businesses look like potential bargains

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Dec 01, 2021
Summary
  • Toyota Motor Corp, Wells Fargo & Co and Goldman Sachs Group Inc are trading below their Graham Numbers
  • The Graham Number is calculated as the square root of 'earnings per share times book value per share times 22.5'
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One way to unearth potential value opportunities is to look for stocks that are trading below their Graham Numbers, as such stocks could be trading at a discount to their intrinsic values. The Graham Number is calculated as the square root of "earnings per share times book value per share times 22.5."

Thus, investors may want to consider the following stocks, as they are trading below their Graham Numbers.

Toyota Motor Corp

The first stock to consider is Toyota Motor Corp (

TM, Financial), a Japanese automaker.

The stock price traded around $177.85 per share at close on Tuesday, which is below the Graham Number of $259.42 as of the September 2021 quarter, for a price-to-Graham-Number ratio of approximately 0.68.

The stock has risen by 33.63% over the past year for a market capitalization of $252.41 billion and a 52-week range of $135.17 to $188.18.

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GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and 7 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $210.61 per share.

Wells Fargo & Co

The second stock to consider is Wells Fargo & Co (

WFC, Financial), a San Francisco, California-based American bank major.

The stock price traded around $47.78 per share at close on Tuesday, which is below the Graham Number of $56.59 as of the September 2021 quarter, for a price-to-Graham-Number ratio of approximately 0.87.

The stock has risen by 70.07% over the past year for a market capitalization of $196.57 billion and a 52-week range of $27.84 to $52.56.

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GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and 5 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $52.99 per share.

Goldman Sachs Group Inc

The third company investors may want to consider is Goldman Sachs Group Inc (

GS, Financial), a New York-based financial services giant focusing on corporations, financial institutions, governments and individuals worldwide.

The stock traded around $380.99 per share at close on Tuesday, which is below the Graham Number of $610.67 as of the September 2021 quarter, for a price-to-Graham-Number ratio of 0.64.

The stock has risen 63.20% over the past year for a market capitalization of $129.75 billion and a 52-week range of $231.35 to $426.15.

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GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and 6 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $454.25 per share.

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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