Value Screeners Identify Opportunities in December

As investors prepare for the holiday season and monitor developments in the new Omicron variant of Covid-19, GuruFocus’ value screeners continue finding investing opportunities.

GuruFocus’ value screeners, a Premium feature, applies strategies from value investing legends like Benjamin Graham, Peter Lynch and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio).

Dow rebounds following Wednesday dip

On Thursday, the Dow Jones Industrial Average closed at 34,639.79, up 617.75 points from Wednesday’s close of 34,022.04 and 156.07 points from Tuesday’s close of 34,483.72. Dow component Boeing Co. (BA, Financial) surged over 6% on news that the Civil Aviation Administration of China cleared the Boeing 737 Max to resume flights. The 737 Max was grounded in 2019 following two fatal crashes due to a computer system issue.

Stocks rebounded on the back of President Biden’s comments that while the U.S. tightened its testing policies and mask mandates to prevent the spread of the new variant, pandemic lockdowns are not needed. Biden told reporters that the U.S., which is “in a better position than a year ago to fight Covid,” aims to increase testing, vaccinations and booster shots.

On Thursday, the mean day’s change of the Dow 30 stocks is 1.78% with a median of 1.91%.

Ben Graham Net-Net

Graham, author of “The Intelligent Investor,” defined a net-net as a stock trading less than 66% of net current asset value, which equals current assets minus total liabilities. The investor also defined net-net working capital as the sum of cash and short-term investments, 75% of accounts receivable and 50% of total inventory, less total liabilities.

Table 1 lists the Ben Graham Net-Net stocks for each GuruFocus region as of Thursday.

Table 1

Peter Lynch Screen

Peter Lynch, the legendary manager of the Fidelity Magellan Fund during the 1980s, applied a simple rule to find undervalued stocks: Compare the share price to a price at 15 times earnings per share. If the share price is less than the earnings line price, the stock is undervalued.

Table 2 lists the Peter Lynch stocks for each GuruFocus region as of Thursday.

Table 2

Buffett-Munger

As the name implies, the Buffett-Munger Screener applies Buffett and Munger’s four-criterion approach to investing: understandable business, favorable growth prospects, shareholder-oriented management and attractive valuation. Key criteria include strong business predictability and low price-earnings-to-growth ratios. As of Thursday, the Buffett-Munger investing strategy has returned a cumulative 374.7% since its inception in 2009.

Table 3 lists the number of Buffett-Munger stocks in each subscription region as of Thursday.

Table 3

Undervalued-Predictable Screener

Like the Buffett-Munger Screener, the Undervalued-Predictable Screener also looks for stocks that have high business predictability and are trading at fair intrinsic value. For the Undervalued-Predictable Screener, GuruFocus considers the discount free cash flow model and the discount earnings model.

As of Thursday, the Undervalued-Predictable investing strategy returned a cumulative 446.28% since its inception in 2009.

Table 4 lists the number of Undervalued-Predictable stocks in each subscription region as of Thursday.

Table 4

GuruFocus also provides several other value screens, including the Historical Low Price-Book Screen, the Historical Low Price-Sales Screen, the 52-week Lows Screen, the 52-week Highs Screen and the High Dividend Yield Screen. Table 5 lists the number of stocks making each of the above screens for each subscription region as of Thursday.

Table 5

Premium users can also create their own customized screens using GuruFocus’ All-in-One Screener.