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.
General Motors
The first stock that makes the cut is General Motors Co. (GM, Financial), a Detroit-based automaker.
The company has a price-to-tangible book value ratio of approximately 0.95, which is more appealing than the industry median of 1.55 and ranks higher than 67.42% of the 1,154 companies that operate in the vehicles and parts industry.
The stock closed at $37.27 per share on May 11, while the tangible book value per share was $38.03.
The stock has a market capitalization of $50.60 billion and a 52-week range of $34.58 to $67.21.
GuruFocus assigned a score of 5 out of 10 for the company's financial strength and a 7 out of 10 rating for its profitability.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $61.27 per share.
Kinross Gold
The second stock that meets the criteria is Kinross Gold Corp. (KGC, Financial), a Toronto-based explorer, developer and miner of gold properties in the United States, Brazil, Chile, Russia, Mauritania and Ghana.
The company has a price-to-tangible book value ratio of approximately 0.8, which is more appealing than the industry median of 1.90 and ranks better than 81.31% of the 2,188 companies that operate in the metals and mining industry.
The stock was trading at $4.32 per share at close on May 11, while the tangible book value per share was $5.16.
The stock has a market capitalization of $4.45 billion and a 52-week range of $4.02 to $8.34.
GuruFocus assigned a score of 6 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. The average target price is $7.69 per share.
Energy Transfer
The third stock that qualifies is Energy Transfer LP (ET, Financial), a Dallas-based oil and gas midstream operator.
The company has a price-to-tangible book value ratio of 1.38, which is more appealing than the industry median of 1.49 and ranks better than 52.29% of the 939 companies that operate in the oil and gas industry.
The stock closed at $10.73 per share on May 11, while the tangible book value per share was $7.73.
The stock has a market capitalization of $32.51 billion and a 52-week range of $7.96 to $12.48.
GuruFocus assigned a score of 4 out of 10 for the company's financial strength and a 7 out of 10 rating for its profitability.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $15.33 per share.
