6 Undervalued Stocks With Growing Book Values

Cheesecake Factory, Southwest Airlines make the list

Author's Avatar
Oct 25, 2018
Article's Main Image

According to the GuruFocus All-In-One Screener, the following companies have grown their book value per share (BV/S) over the last decade.

BV/S is calculated as total equity minus preferred stock, divided by shares outstanding. Theoretically, it is what shareholders will receive if a 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 McGrath RentCorp (MGRC, Financial) has grown 7% over the last 10 years. The price-book ratio is 2.1 and the price to tangible book value is 2.3.

1557947983.png

The business-to-business rental company, which rents and sells portable modular buildings and storage containers, has a $1.12 billion market cap.

According to the discounted cash flow calculator, the stock is undervalued and is trading with a 42% margin of safety at $46.50. The stock price has been as high as $68.79 and as low as $42.98 in the last 52 weeks. As of Thursday, it is 32.61% below its 52-week high and 7.86% above its 52-week low. The price-earnings ratio is 6.82.

Jim Simons (Trades, Portfolio)' Renaissance Technologies is the largest guru shareholder of the company with 2.87% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 1.12%, Barrow, Hanley, Mewhinney & Strauss with 0.13% and Mario Gabelli (Trades, Portfolio) with 0.11%.

Industrias Bachoco SAB de CV's (IBA, Financial) BV/S has grown 10% over the past decade. The price-book ratio is 1.2 and the price to tangible book value is 1.2.

2100926377.png

The company, which produces eggs, poultry and swine products, has a market cap of $2.34 billion.

According to the DCF calculator, the stock is undervalued and is trading with a 44% margin of safety at $47. The stock price has been as high as $64.44 and as low as $47.32 in the last 52 weeks. As of Thursday, it is 25.05% below its 52-week high and 2.07% above its 52-week low. The price-earnings ratio is 8.42.

The company’s largest guru shareholder is Simons with 1.12% of outstanding shares, followed by Royce with 0.43%.

The BV/S of China Telecom Corp. Ltd. (CHA, Financial) has grown 5% over the last 10 years. The price-book ratio is 0.8 and the price to tangible book value is 0.8.

1237079157.png

The company, which provides a range of wireline and mobile telecommunications services, has a $42.12 billion market cap.

According to the DCF calculator, the stock is undervalued and is trading with a 26% margin of safety at $49. The stock price has been as high as $51.49 and as low as $41.28 in the last 52 weeks. As of Thursday, it is 4.66% below its 52-week high and 18.92% above its 52-week low. The price-earnings ratio is 13.48.

Simons is the company's largest guru shareholder with 0.02% of outstanding shares, followed by Paul Tudor Jones (Trades, Portfolio) with 0.01%.

Southwest Airlines Co.'s (LUV, Financial) BV/S has grown 7% over the past decade. The price-book ratio is 2.9 and the price to tangible book value is 3.3.

694322628.png

The airline has a market cap of $28.63 billion.

According to the DCF calculator, the stock is undervalued and is trading with a 71% margin of safety at $50. The stock price has been as high as $66.99 and as low as $49.02 in the last 52 weeks. As of Thursday, it is 25.51% below its 52-week high and 1.78% above its 52-week low. The price-earnings ratio is 17.17.

With 12.86% of outstanding shares, PRIMECAP Management (Trades, Portfolio) is the company's largest guru shareholder, followed by Warren Buffett (Trades, Portfolio) with 9.87%, Steven Cohen (Trades, Portfolio) with 0.61%, Barrow, Hanley, Mewhinney & Strauss with 0.38% and the T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.25%.

The BV/S of Cheesecake Factory Inc. (CAKE, Financial) has grown 6% over the last 10 years. The price-book ratio is 3.6 and the price to tangible book value is 3.7.

396732834.png

The company owns and operates about 200 restaurants in the United States. It has a market cap of $2.3 billion.

According to the DCF calculator, the stock is undervalued and is trading with a 17% margin of safety at $50.17. The stock price has been as high as $60.19 and as low as $41.50 in the last 52 weeks. It is currently 16.49% below its 52-week high and 21.12% above its 52-week low. The price-earnings ratio is 17.02.

With 2.45% of outstanding shares, Richard Snow (Trades, Portfolio) is the company's largest guru shareholder, followed by Ron Baron (Trades, Portfolio) with 1.77%, Gabelli with 1.33% and Lee Ainslie (Trades, Portfolio) with 0.47%.

Multi-Color Corp.'s (LABL, Financial) BV/S has grown 12% over the past decade. The price-book ratio is 1.5.

844193253.png

The company, which produces a variety of product labels, has a market cap of $1.05 billion.

According to the DCF calculator, the stock is undervalued and is trading with a 31% margin of safety at $51. The stock price has been as high as $89.70 and as low as $50.97 in the last 52 weeks. As of Thursday, it was 43.18% below its 52-week high. The price-earnings ratio is 13.10.

With 0.17% of outstanding shares, Ken Fisher (Trades, Portfolio) is the company's largest guru shareholder.

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

Read more here: