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 multiplied by the book value per share and by 22.5.
Thus, investors may want to consider the following stocks since they are trading below their Graham Numbers.
Vale
The first stock to consider is Vale SA (VALE, Financial), a Brazilian miner of iron, nickel and coal.
The stock traded around $13.76 per share at close on Tuesday, which was below the Graham Number of $22.98, for a price-to-Graham Number ratio of about 0.59.
The stock is down 29.40% year over year for a market cap of $64.04 billion and a 52-week range of $11.16 to $21.29.
GuruFocus has rated the company's financial strength 6 out of 10 and its profitability 8 out of 10.
On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $18.20 per share.
Capital World Investors is the largest fund holder of the stock with 3.03% of shares outstanding. The asset management firm is followed by Capital Research Global Investors with a 2.79% stake and Capital International Investors with 2.49%.
Barrick Gold
The second company investors may want to consider is Barrick Gold Corp. (GOLD, Financial), a Canadian miner of gold and other precious metals with mineral assets located in North and South America, Africa and Saudi Arabia.
The stock closed around $16.21 per share on Tuesday, which was below the Graham Number of $16.60, for a price-to-Graham Number ratio of 0.98.
The stock has fallen 18.34% over the past year for a market capitalization of $28.68 billion and a 52-week range of $14.80 to $26.07.
GuruFocus has rated the company's financial strength 6 out of 10 and its profitability 7 out of 10.
On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $24.07 per share.
Van Eck Associates Corp., FMR LLC and the VanEck Gold Miners ETF are among the largest fund holders of the company with 4.21%, 3.96% and 3.78% of shares outstanding.
Itau Unibanco
The third company investors may want to consider is Itau Unibanco Holding SA (ITUB, Financial), a Brazilian regional bank.
The stock traded around $5.12 per share at close on Tuesday, which was below the Graham Number of $5.68, for a price-to-Graham Number ratio of 0.91.
The stock is up 5.94% year over year for a market cap of $50.62 billion and a 52-week range of $3.60 to $5.89.
GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and 5 out of 10 for its profitability.
On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $5.95 per share.
Schroder Investment Management Group, Goldman Sachs Group Inc. and Westwood Global Investments LLC are among the largest fund holders of the company with 1.31%, 0.70% and 0.57% of shares outstanding.
