Donald Yacktman, a well-known value investor and founder of Yacktman Asset Management (Trades, Portfolio), took the forward rate of return into account when he evaluated the attractiveness of a stock. This valuation ratio is calculated as normalized free cash flow yield plus real growth plus inflation.
Value investors could be interested in the following U.S.-listed equities as their forward rates of return are more than doubling the return on 20-year high-quality market corporate bonds, which is 3.07% as of the time of writing.
Global Ship Lease
The first stock that could be of interest is Global Ship Lease Inc. (GSL, Financial), a London-based owner and charterer of more than 40 medium and small-sized container vessels to container shipping companies, using fixed-rate charters.
Global Ship Lease's forward rate of return is 29.64%, which ranks higher than 94% of 696 companies that operate in the transportation industry.
The share price has increased by 54.84% over the past year to close at $24.7 on Tuesday for a market cap of $884.05 million. The 52-week range is $11.30 to $26.51. Its price-earnings ratio is 7.46 and its price-book ratio is 1.38.
Riley Financial Inc., Punch & Associates Investment Management Inc. and Kelso & Company L.P. are among the largest institutional shareholders of the company.
The GEO Group
The second stock that could appeal to value investors is The GEO Group Inc. (GEO, Financial), a Boca Raton, Florida-based real estate investment trust focusing on health care facilities in the U.S. and internationally.
GEO Group's forward rate of return is 20.40%, which ranks higher than 91% of the 557 companies that operate in the REIT industry.
The share price has declined by 15.90% over the past year to trade at $7.87 at close on Tuesday for a market cap of $905.54 million and a 52-week range of $4.96 to $11. Its price-to-funds from operations ratio is 3.11 and its price-book ratio is 0.90.
Vanguard Group Inc., BlackRock Inc. and iShares Core S&P Small-Cap ETF are among the company's largest institutional shareholders.
Hollysys Automation Technologies
The third stock that could be of interest is Hollysys Automation Technologies Ltd. (HOLI, Financial), a Chinese provider of automation and control technologies in China, Southeast Asia and the Middle East.
Hollysys Automation’s forward rate of return is 9.54%, which ranks higher than 58% of the 1,827 companies that operate in the industrial products industry.
The share price was flat year over year, trading at $14.7 at Tuesday's close, giving it a market cap of $869.80 million and a 52-week range of $11.05 to $21.24. Its price-earnings ratio is 12.33 and its price-book ratio is 0.81.
Chris Davis (Trades, Portfolio), FIL Ltd and Wellington Management Group LLP are among the largest institutional shareholders of the company.
