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A Trio of Graham Stocks to Consider

These businesses look like potential bargains

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Feb 10, 2022
Summary
  • Westlake Chemical, West Fraser Timber and CNA Financial 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 since they are trading below their Graham Numbers.

Westlake Chemical

The first stock to consider is Westlake Chemical Corp. (

WLK, Financial), a Houston-based specialty chemicals company.

The stock traded around $103.58 per share at close on Wednesday, which was below the Graham Number of $104.19, for a price-to-Graham Number ratio of approximately 0.99.

The stock has risen by 22.1% over the past year for a market capitalization of $13.51 billion and a 52-week range of $78.06 to $109.01.

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GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and 8 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $121.12 per share.

West Fraser Timber

The second company investors may want to consider is West Fraser Timber Co. Ltd. (

WFG, Financial), a Canadian producer and seller of lumber, panels, pulp and paper.

The stock closed around $98.28 per share on Wednesday, which was below the Graham Number of $164.44, for a price-to-Graham-Number ratio of 0.60.

The stock has risen 39.47% over the past year for a market capitalization of $10.51 billion and a 52-week range of $61.36 to $101.83.

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GuruFocus has assigned a score of 8 out of 10 for both the company's financial strength and its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average price target of $122.37 per share.

CNA Financial

The third company investors may want to consider is CNA Financial Corp. (

CNA, Financial), a Chicago-based property and casualty insurer.

The stock traded around $47.99 per share at close on Wednesday, which was below the Graham Number of $67.85, for a price-to-Graham Number ratio of 0.71.

The stock has risen 9.52% over the past year for a market capitalization of $13.03 billion and a 52-week range of $41.44 to $49.08.

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GuruFocus has assigned a score of 4 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 hold with an average price target of $50 per share.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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