A Trio of Capital-Intensive Stocks to Consider

Investors may be interested in these companies due to their attractive price-to-tangible book value ratios

Author's Avatar
Mar 22, 2022
Summary
  • Renault, Outokumpu Oyj and Beazer Homes are undervalued compared to their peers.
  • For capital-intensive companies, it is preferable to use the price-to-tangible book value as the appraisal of their businesses comes primarily from tangible assets.
Article's Main Image

When looking for value opportunities among capital-intensive businesses, investors could be interested in stocks with price-to-tangible book value ratios that are more appealing than their respective industry medians.

The price-to-tangible book value ratio is preferred to the price-book ratio for these publicly traded companies since the appraisal of their business mainly derives from tangible assets.

Renault

The first stock that makes the cut is Renault SA (

RNLSY, Financial), a French manufacturer and global distributor of vehicles.

The company has a price-to-tangible book value ratio of approximately 0.35, which is more appealing than the industry median of 1.73, ranking higher than 95.77% of the 1,134 companies that operate in the vehicles and parts industry.

The stock closed at $5.04 per share on March 21, while the tangible book value per share was $14.93.

1506319740988104704.png

The stock has a market capitalization of $7.49 billion and a 52-week range of $4.55 to $9.34.

GuruFocus assigned a score of 4 out of 10 for the company's financial strength and a 5 out of 10 rating for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight.

Outokumpu Oyj

The second stock that qualifies is Outokumpu Oyj (

OUTKY, Financial), a Helsinki,-based manufacturer of various stainless steel products, which it then sells in Finland and internationally .

The company has a price-to-tangible book value ratio of approximately 0.87, which is more appealing than the industry median of 1.16, ranking better than 67% of the 565 companies that operate in the steel industry.

The stock was trading at $2.59 per share at close on March 21, while the tangible book value per share was $2.98.

1506319743886368768.png

The stock has a market capitalization of $2.35 billion and a 52-week range of $2.505 to $3.63.

GuruFocus assigned a score of 6 out of 10 for the company's financial strength and a 4 out of 10 rating for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight. The average target price is $7.52 per share.

Beazer Homes USA

The third stock that qualifies is Beazer Homes USA Inc. (

BZH, Financial), an Atlanta-based developer of single and multi-family homes under the Beazer Homes, Gatherings and Choice Plans brands. The company sells its homes through commissioned new home sales consultants and independent brokers.

The company has a price-to-tangible book value ratio of 0.7, which is more appealing than the industry median of 1.24, ranking better than 82.24% of the 107 companies that operate in the homebuilding and construction industry.

The stock closed at $16.45 per share on March 21, while the tangible book value per share was $23.65.

1506319746210013184.png

The stock has a market capitalization of $520.35 million and a 52-week range of $14.38 to $26.12.

GuruFocus assigned a score of 5 out of 10 for the company's financial strength and a 6 out of 10 rating for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $30 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
Rating:
0 / 5 (0 votes)
Author's Avatar
WRITTEN BY

Request A Demo

Learn more about GuruFocus' key features, including All-In-One Screener, backtesting, 30-year financial, stock summary page, guru trades, insider trades, excel Add-in, google sheets and much more.

GuruFocus Screeners

Related Articles