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6 Undervalued Stocks With Rising Book Value

Boston Beer, Cognizant with margins of safety and rising BV/S

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Oct 31, 2017
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According to GuruFocus’ All-In-One Screener, the following companies have grown their book values per share (BV/S) over the past decade.

BV/S is calculated as total equity minus preferred stock, divided by shares outstanding (EOP). Theoretically, it is what shareholders will receive if the company is liquidated. Total equity is a balance sheet item and equal to total assets minus total liabilities. Since the BV/S may not reflect the company’s true value, some investors check the tangible book value to confirm their investment ideas.

The BV/S of Cognizant Technology Solutions Corp. (CTSH) has grown by 25% over the past 10 years. The price-book (P/B) ratio is 4.2, and the price to tangible book is 6.3.

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The Information Technology (IT) services provider has a market cap of $44.53 billion.

According to the discounted cash flow (DCF) calculator, the stock is undervalued and trading with a margin of safety of 15% at $75.39. The stock price has been as high as $75.51 and as low as $51.12 in the past 52 weeks. It is 0.16% below its 52-week high and 47.48% above its 52-week low. The price-earnings (P/E) ratio is 24.09.

Richard Pzena (Trades, Portfolio) is the largest shareholder among the gurus with 1.19% of outstanding shares followed by Jeremy Grantham (Trades, Portfolio) with 0.76%, Pioneer Investments (Trades, Portfolio) with 0.6%, Jana Partners (Trades, Portfolio) with 0.37% and Matthews Pacific Tiger Fund (Trades, Portfolio) with 0.37%.

Advance Auto Parts Inc. (AAP)’s BV/S has grown by 15% over the past 10 years. The P/B ratio is 1.9, and the price to tangible book value is 0.4.

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With a market cap of $6.05 billion it is an automotive parts provider serving professional as well as do-it-yourself customers.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 12% at $81.93. The stock price has been as high as $177.83 and as low as $81.31 in the past 52 weeks. It is 53.93% below its 52-week high and 0.76% above its 52-week low. The P/E ratio is 16.39.

The company’s largest shareholder among the gurus is

Steve Mandel (Trades, Portfolio) with 2.77% of outstanding shares followed by Sarah Ketterer (Trades, Portfolio) with 2.29%, NWQ Managers (Trades, Portfolio) with 0.49% and Steven Cohen (Trades, Portfolio) with 0.34%.

The BV/S of Fomento Economico Mexicano SAB (FMX) has grown by 10% over the past 10 years. The P/B ratio is 2.0, and the price to tangible book value is 3.9.

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With a market cap of $32.69 billion, the company produces and markets soft drinks.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 25% at $91.36. The stock price has been as high as $103.82 and as low as $73.45 in the past 52 weeks. It is 12% below its 52-week high and 24.38% above its 52-week low. The P/E ratio is 14.00.

Ron Baron (Trades, Portfolio) is the largest shareholder among the gurus with 0.11% of outstanding shares followed by Mario Gabelli (Trades, Portfolio) with 0.05% and Tom Russo (Trades, Portfolio) with 0.04%.

Reinsurance Group of America Inc. (RGA)’s BV/S has grown by 10% over the past 10 years. The price to tangible book value is 1.2.

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It is an insurance holding company that provides products such as life and health reinsurance. It has a market cap of $9.82 billion.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 12% at $152.19. The stock price has been as high as $152.19 and as low as $107.12 in the past 52 weeks. It is 42.07% above its 52-week low. The P/E ratio is 12.53.

The largest shareholder among the gurus is

Diamond Hill Capital (Trades, Portfolio) with 0.71% followed by Chuck Royce (Trades, Portfolio) with 0.33% and NWQ Managers with 0.2%.

The BV/S of Boston Beer Co. Inc. (SAM) has grown by 18% over the past 10 years. The P/B ratio is 4.7, and the price to tangible book value is 4.8.

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The company has a market cap of $2.01 billion. It sells low alcohol drinks in the U.S.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 20% at $167.25. The stock price has been as high as $181.20 and as low as $128.70 in the past 52 weeks. It is 7.70% below its 52-week high and 29.95% above its 52-week low. The P/E ratio is 22.85.

Ken Fisher (Trades, Portfolio) is the largest shareholder among the gurus with 2.84% of outstanding shares followed by Gabelli with 0.22% and Joel Greenblatt (Trades, Portfolio) with 0.05%.

Amgen Inc. (AMGN)’s BV/S has grown by 10% over the past 10 years. The P/B ratio is 4.0, and the price to tangible book value is 14.8.

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The biotechnology company has a market cap of $127.43 billion.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 17% at $175.28. The stock price has been as high as $191.10 and as low as $31.16 in the past 52 weeks. It is 8.28% below its 52-week high and 31.16% above its 52-week low. The P/E ratio is 15.83.

The company’s largest shareholder among the gurus is

PRIMECAP Management (Trades, Portfolio) with 3.17% of outstanding shares followed by Jim Simons (Trades, Portfolio) with 0.47% and David Carlson (Trades, Portfolio) with 0.06%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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