Benjamin Graham, the pioneer of value investing, co-author with David Dodd of "Security Analysis" and author of "The Intelligent Investor," suggested looking for reasonably priced stocks to increase the odds of finding value opportunities.
One way to do that is looking for stocks with a Graham blended multiplier of less than 22.5 as shares of these securities are probably being exchanged cheaply.
The Graham blended multiplier is calculated by multiplying the price-earnings ratio of the stock by its price-book ratio.
Here are some results of my search, which excludes small, micro and nano caps.
A positive recommendation rating ranging between hold and strong buy corroborates expectations for well-performing stocks.
The first company is Tenaris S.A. (TS, Financial). Shares of the oil and gas equipment and services provider, which is based in Luxembourg, closed at $20.53 on Friday for a market capitalization of $12.12 billion.
The stock has a Graham blended multiplier of 13.62, as the price-earnings ratio is 13.1 and the price-book ratio is 1.04. The oil and gas equipment and services industry has a median of 15.06 for the price-earnings ratio and of 0.92 for the price-book ratio.
Tenaris beats 51.61% of competitors in terms of price-earnings ratio and 60% of competitors in terms of price-book ratio.
Wall Street issued a strong buy recommendation rating for shares of Tenaris with an average target price of $30.75.
Over the past year through Oct. 18, the stock has declined 35% to below the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $19.96 to $32.63.
The 14-day relative strength index of 43 suggests the stock is neither overbought nor oversold.
The second company is Molson Coors Brewing Co. (TAP, Financial). Shares of the Denver-based brewing company closed at $56.98 on Friday for a market capitalization of $12.34 billion.
The stock has a Graham blended multiplier of 12.28, as the price-earnings ratio is 13.8 versus the industry median of 22.62 and the price-book ratio is 0.89 versus the industry median of 1.85.
Molson Coors tops 79.47% of competitors operating in the beverages - brewers industry in terms of price-earnings ratio and 76.47% of competitors in terms of price-book ratio.
Wall Street issued a moderate buy recommendation rating for shares of Molson Coors with an average target price of $60.
In the past year through Oct. 18, the share price has decreased 3% to below the 200-day simple moving average line. However, it is still above the 50- and 100-day lines.
The 52-week range is $49.92 to $67.62.
The 14-day relative strength index of 58 indicates the stock is neither overbought nor oversold.
The third company is JetBlue Airways Corp. (JBLU, Financial). Shares of the airline company closed at $16.96 on Friday for a market capitalization of $4.92 billion.
The stock has a Graham blended multiplier of 12.96, as the price-earnings ratio is 11.78 and the price-book ratio is 1.1. The airlines industry has a median of 11.79 for the price-earnings ratio and of 1.52 for the price-book ratio.
JetBlue Airways tops 52.73% of competitors in terms of price-earnings ratio and 70% in terms of price-book ratio.
Wall Street issued a hold recommendation rating for shares of JetBlue with an average target price of $20.20.
Over the past year through Oct. 18, the share price has risen 2%, but it is still below the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $15.19 to $19.83.
The 14-day relative strength index of 51 suggests the stock is neither overbought nor oversold.
Disclosure: I have no positions in any securities mentioned.
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