One key feature for GuruFocus Premium members are value screens that follow the footsteps of legendary investors like Benjamin Graham, Peter Lynch and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio). Not only can the value screens highlight global market trends, but they can also identify good opportunities for the remainder of the year.
Three investors, three different styles
GuruFocus’ value screens include the Ben Graham Net-net screen, the Peter Lynch Growth screen and the Buffett-Munger screen. Graham’s screen looks for companies whose share price is less than two-thirds of its net-net working capital, which is defined as cash plus 75% of receivables plus 50% of inventories less total liabilities. On the other hand, Buffett and Charlie Munger (Trades, Portfolio)’s screen looks for companies that have strong economic moats, predictable earnings and attractive price-earnings-to-growth ratios. Finally, Lynch’s “growth with lower valuation” screen looks for companies with a price-earnings ratio below 14, relatively predictable earnings and a 10-year revenue growth rate of at least 6%.
Tables 1 and 2 show the value screener records as of Aug. 9 and Sept. 7.
Screener Name | USA | Canada | UK / Ireland | Europe | Asia | Oceania | Latin America | Africa | India |
Ben Graham Net-Net | 219 | 78 | 46 | 199 | 564 | 17 | 4 | 12 | 143 |
Undervalued Predictable | 47 | 4 | 25 | 63 | 60 | 6 | 18 | 7 | 0 |
Buffett-Munger | 17 | 5 | 16 | 41 | 70 | 1 | 12 | 5 | 38 |
Historical Low Price-Sales | 8 | 1 | 8 | 19 | 112 | 1 | 11 | 4 | 6 |
Historical Low Price-Book | 11 | 4 | 10 | 31 | 112 | 0 | 16 | 7 | 8 |
Peter Lynch Growth | 35 | 3 | 18 | 66 | 111 | 2 | 30 | 4 | 27 |
Walter Schloss | 18 | 29 | 27 | 99 | 361 | 12 | 12 | 5 | 42 |
Table 1: Value screener record as of Aug. 9
Screener Name | USA | Canada | UK / Ireland | Europe | Asia | Oceania | Latin America | Africa | India |
Ben Graham Net-Net | 147 | 69 | 46 | 196 | 576 | 15 | 3 | 14 | 149 |
Undervalued Predictable | 48 | 5 | 25 | 65 | 61 | 6 | 20 | 7 | 0 |
Buffett-Munger | 17 | 4 | 16 | 42 | 75 | 0 | 12 | 5 | 35 |
Historical Low Price-Sales | 7 | 1 | 7 | 18 | 123 | 1 | 10 | 5 | 7 |
Historical Low Price-Book | 12 | 3 | 11 | 29 | 109 | 2 | 16 | 8 | 8 |
Peter Lynch Growth | 35 | 3 | 16 | 72 | 124 | 5 | 31 | 3 | 27 |
Walter Schloss | 20 | 36 | 29 | 146 | 386 | 12 | 11 | 4 | 53 |
Table 2: Value screener record as of Sept. 7
According to Tables 1 and 2, the Europe and Asia regions have a high number of Graham and historical low-price stocks. Additionally, the Asia region had higher Graham and historical low-price stocks in September compared to August, further suggesting that Asian markets are undervalued compared to other regions.
While the Buffett indicator sheds light on U.S. market valuations, we can also apply the "Oracle of Omaha’s"Â favorite market indicator to global markets. Figure 3 shows the ratio of market cap to gross domestic product for approximately 20 global markets, while Figure 4 shows the implied market return based on the market ratios.
Figure 3
Figure 4
See also
As said above, Premium members can view the stocks making the value screeners. GuruFocus also offers subscriptions for popular regions like the U.S., Asia, Europe, the U.K., Latin America and Oceania. We now offer India and Pakistan as a separate region.
Disclosure: No positions.