Should You Read the Intelligent Investor Book?
(0:25) - The Book That Changed Warren Buffett’s Life
(4:30) - Benjamin Graham’s Impact On Investing: The Lessons To Learn
(10:10) - Stock Screener: Tracey’s Top Stock Picks
(23:30) - Episode Roundup: MOV, KBH, RES, AFCG, RELL
Podcast@Zacks.com
Welcome to Episode #342 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Recently, some investors on X/Twitter have been debating whether they should read Benjamin Graham’s The Intelligent Investor book.
First published in 1949, this is the book that Warren Buffett has said changed his life. He read it at age 19 and went on to work for Benjamin Graham in his 20s. Ben Graham is considered to be the “father” of value investing due to The Intelligent Investor as well as his endorsement of the PEG ratio, which combines both growth and value fundamentals.
Why wouldn’t any investor want to read the book?
It’s about 600 pages and a bit of a slog to get through. Additionally, the last update was nearly 20 years ago, in 2006, so it feels a bit dated again.
Screening for Ben Graham Stocks
Ben Graham is considered one of the great investing “gurus.” Zacks Research Wizard has a guru screen which includes one for Ben Graham.
It’s a more advanced screen than what you would find on Zacks.com screening tool. It does not include the Zacks Rank, which means you could get Zacks Strong Sell and Sell stocks too but the screen does include dividend paying stocks.
This screen returned 18 stocks.
1. Movado Group, Inc. (MOV)
Movado Group designs and sells luxury watches globally. On Aug 24, 2023, Movado reported fiscal second quarter 2024 results and lowered full year guidance due to challenging market conditions. As a result, the analysts have cut full year earnings estimates. Movado is expected to see earnings decline 47.2% year-over-year.
But Movado is cheap with a forward P/E of 12.4. It also pays a dividend yielding 5.1%.
Should Movado be on your short list?
2. KB Home (KBH)
KB Home is a national home builder with a market cap of $4 billion. While KB Home shares are up 56.5% year-to-date, earnings in fiscal 2023 are expected to fall 31% as home sales have fallen off of pandemic highs.
KB Home is dirt cheap, with a forward P/E of 7.8. It also pays a dividend currently yielding 1.5%.
Should you dive into the home builders this fall?
3. RPC, Inc. (RES)
RPC is a holding company for several oilfield services companies. Earnings are expected to rise 15.7% in 2023 to $1.18 from $1.02 last year.
Shares of RPC are down 7.5% year-to-date but it’s cheap, with a P/E of 7.0. It pays a dividend yielding 1.7%.
Should an energy company like RPC be on your short list?
4. AFC Gamma (AFCG)
AFC Gamma originates and underwrites loans secured by commercial real estate and other types of financing solutions. It specializes in lending to cannabis operators. AFC Gamma is a small cap at $265.7 million.
Earnings of AFC Gamma are expected to fall 17.1% to $2.08 from $2.51 last year. Shares have fallen 16.3% year-to-date. It’s cheap with a forward P/E of 6.3.
AFC Gamma also pays a dividend with a yield of 14.5%.
Should a REIT like AFC Gamma be on your short list?
5. Richardson Electronics, Ltd. (RELL)
Richardson Electronics is a distributor and global provider of engineered solutions for green energy, power management, custom display and healthcare markets. It’s a micro-cap company with a market cap of just $169.7 million which has been in business for 75 years.
Shares of Richardson Electronics are down 45.3% year-to-date. One estimate has been cut for the full fiscal year in the last week, pushing the Zacks Consensus down to $0.97 from $1.20. Earnings are expected to fall 30.2% this year.
Richardson Electronics is cheap with a forward P/E of 12.5. It pays a dividend yielding 1.9%.
Should Richardson Electronics be on your short list?
What Else Do You Need to Know About Reading the Intelligent Investor?
Tune into this week’s podcast to find out.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
KB Home (KBH) : Free Stock Analysis Report
Richardson Electronics, Ltd. (RELL) : Free Stock Analysis Report
Movado Group Inc. (MOV) : Free Stock Analysis Report
RPC, Inc. (RES) : Free Stock Analysis Report
AFC Gamma Inc. (AFCG) : Free Stock Analysis Report
