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3 Stocks Trading Below the GF Value Line

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·4 min read
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- By Alberto Abaterusso

When looking for bargain opportunities as a value investor, you may want to consider the following securities as their share prices are trading near or below the intrinsic value estimated by the GF Value Line.

The GF Value is a unique intrinsic value calculation from GuruFocus that utilizes the three components listed below:

  • The stock's historical multiples, such as the price-earnings ratio, the price-sales ratio, the price-book ratio and the price-to-free cash flow ratio.

  • A GuruFocus adjustment factor based on the past returns and growth of the company's business.

  • Estimations of future business performance.




Gray Television

The first stock that meets the criteria is Gray Television Inc. (NYSE:GTN), an Atlanta-based television broadcasting company.

Gray Television's share price was $22.09 at close on Friday, while its GF Value stands at $25.74, resulting in a price-to-GF Value ratio of 0.86 and a rating of modestly undervalued.

3 Stocks Trading Below the GF Value Line
3 Stocks Trading Below the GF Value Line

The stock rose 66.34% over the past year, determining a market capitalization of $2.10 billion and a 52-week range of $11.73 to $23.25.

The price-earnings ratio is 5.54 (versus the industry median of 21.6) and the price-book ratio is 1.08 (versus the industry median of 1.87). Also, the price-sales ratio is 0.81 (versus the industry median of 1.73) and the price-to-free cash flow ratio is 3.37 (versus the industry median of 14.55).

The stock has a GuruFocus profitability rating of 8 out of 10.

Concerning the future business performance, sell-side analysts on Wall Street estimate that earnings per share will rise by approximately 36.90% every year over the next five years.

As of May, the stock has five strong buy recommendation ratings and two buy recommendation ratings for an average target price of $28.86 per share.

Genworth Financial

The second stock that meets the requirements is Genworth Financial Inc. (NYSE:GNW), a Richmond, Virginia-based financial services company providing its global clients with various insurance solutions.

Genworth Financials' shares closed at $4.10 per unit on Friday compared to its GF Value of $4.16, resulting in a price-to-GF Value ratio of 0.99 and a rating of fairly valued.

3 Stocks Trading Below the GF Value Line
3 Stocks Trading Below the GF Value Line

The stock rose by 44% over the past year for a market capitalization of $2.08 billion and a 52-week range is $1.87 to $4.76.

The price-earnings ratio is 4.88 (versus the industry median of 12.3) and the price-book ratio is 0.14 (versus the industry median of 1.16). The price-sales ratio is 0.24 (compared to the industry median of 1.18) and the price-to-free cash flow ratio is 2.03 (versus the industry median of 8.66).

The GuruFocus profitability rating is 4 out of 10.

Regarding future business performance, sell-side analysts on Wall Street forecast that the earnings per share will increase at an average pace of 5% every year over the next five years.

As of May, sell-side analysts on Wall Street have issued five hold recommendation ratings.

Iamgold

The third stock that qualifies is Iamgold Corp. (NYSE:IAG), a Toronto-based mid-tier gold producer with gold mining activities in Burkina Faso, Suriname and Canada. The company also holds development projects and various exploration ventures in West Africa and the Americas.

Iamgold was trading at $3.35 per share at close on Friday compared to the GF Value of $4.31, resulting in a price-to-GF Value ratio of 0.78 and a rating of modestly undervalued.

3 Stocks Trading Below the GF Value Line
3 Stocks Trading Below the GF Value Line

The stock has fallen by nearly 11% over the past year, determining a market capitalization of $1.59 billion. The 52-week range is $2.86 to $5.35.

The price-earnings ratio is 15.7 (compared to the industry median of 19.65) and the price-book ratio is 0.61 (versus the industry median of 2.61). The price-sales ratio is 1.18 (versus the industry median of 1.89) and the price-to-free cash flow ratio is 26.64 (versus the industry median of 14.44).

GuruFocus has assigned the stock a profitability rating of 5 out of 10.

With regard to the future business performance, sell-side analysts on Wall Street predict that the earnings per share will move up by approximately 37% on average every year over the next five years.

As of May, the stock has one strong buy recommendation rating, six buy recommendation ratings and six hold recommendation ratings, for an average target price of $7.65 per share.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.