U.S. markets close in 1 hour 12 minutes
  • S&P 500

    4,243.11
    +18.32 (+0.43%)
     
  • Dow 30

    33,941.70
    +64.73 (+0.19%)
     
  • Nasdaq

    14,212.85
    +71.37 (+0.50%)
     
  • Russell 2000

    2,285.73
    -0.36 (-0.02%)
     
  • Crude Oil

    73.08
    -0.58 (-0.79%)
     
  • Gold

    1,779.70
    -3.20 (-0.18%)
     
  • Silver

    25.88
    -0.15 (-0.56%)
     
  • EUR/USD

    1.1945
    +0.0020 (+0.17%)
     
  • 10-Yr Bond

    1.4780
    -0.0060 (-0.40%)
     
  • GBP/USD

    1.3944
    +0.0011 (+0.08%)
     
  • USD/JPY

    110.6300
    +0.3320 (+0.30%)
     
  • BTC-USD

    33,148.16
    +399.38 (+1.22%)
     
  • CMC Crypto 200

    788.95
    -5.38 (-0.68%)
     
  • FTSE 100

    7,090.01
    +27.72 (+0.39%)
     
  • Nikkei 225

    28,884.13
    +873.20 (+3.12%)
     

A Trio of Graham-Style Stocks for the Value Investor

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

- By Alberto Abaterusso

To enhance the effectiveness of the search for value opportunities, one method is to choose stocks whose "Graham blended multiplier" is less than 22.5. Designed by Benjamin Graham, the father of value investing, the multiplier is equal to the stock's price-earnings ratio multiplied by its price-book ratio.

Thus, value investors could be interested in the following securities, since their Graham blended multipliers are less than 22.5.


Hercules Capital Inc

The first stock investors could be interested in is Hercules Capital Inc (NYSE:HTGC), a Palo Alto, California-based provider of loan and growth capital to develop privately held businesses that are believed to have long-term growth potential.

The stock has a Graham blended multiplier of 22.06, as the price-earnings ratio is 14.51 (versus the industry median of 12.15) and the price-book ratio is 1.52 (versus the industry median of 0.92).

Hercules Capital Inc stock traded at $15.65 per share at close on Feb. 8 for a market capitalization of $1.79 billion.

The share price has risen by 3.57% over the past year for a 52-week range of $5.42 to $16.40.

A Trio of Graham-Style Stocks for the Value Investor
A Trio of Graham-Style Stocks for the Value Investor

Currently, the company pays quarterly dividends to its shareholders. The last payment, 32 cents per common share, was made on Nov. 16, 2020.

GuruFocus assigned a rating of 2 out of 10 to the company's financial strength and of 4 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $14.75 per share.

ConnectOne Bancorp Inc

The second stock investors could be interested in is ConnectOne Bancorp Inc (NASDAQ:CNOB), an Englewood Cliffs, New Jersey-based regional bank providing various banking products and services to consumers and businesses.

The stock has a Graham blended multiplier of 13.38, as the price-earnings ratio is 13.12 (versus the industry median of 12.15) and the price-book ratio is 1.02 (versus the industry median of 0.92).

ConnectOne Bancorp Inc stock traded at $23.36 per share at close on Feb. 8 for a market capitalization of $929.39 million.

The share price has fallen by nearly 2% over the past year, determining a 52-week range of $8.86 to $24.29.

A Trio of Graham-Style Stocks for the Value Investor
A Trio of Graham-Style Stocks for the Value Investor

The company is currently paying quarterly dividends of 9 cents per common share to its shareholders. The last payment was made on Dec. 1, 2020, while the next one will be issued on March 1, producing trailing 12-month and forward dividend yields of 1.54% as of Feb. 8.

GuruFocus assigned a rating of 3 out of 10 to the company's financial strength and of 6 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $27 per share.

Federal Agricultural Mortgage Corp

The third company investors could be interested in is Federal Agricultural Mortgage Corp (NYSE:AGM), a Washington, D.C.-based provider of a secondary market for agricultural loans backed securities.

The stock has a Graham blended multiplier of 10.76, as the price-earnings ratio is 8.28 and the price-book ratio is 1.3.

Federal Agricultural Mortgage Corp stock traded at $82.42 per share at close on Feb. 8 for a market capitalization of $863.12 million.

The share price has risen by 12.46% over the past year for a 52-week range of $40.05 to $83.06.

A Trio of Graham-Style Stocks for the Value Investor
A Trio of Graham-Style Stocks for the Value Investor

Currently, Federal Agricultural Mortgage Corp pays quarterly dividends to its shareholders with the last payment made on Dec. 31, 2020, producing a trailing 12-month dividend yield of 3.87% as of Feb. 8.

GuruFocus assigned a score of 2 out of 10 to the company's financial strength and of 5 out of 10 to its profitability.

On Wall Street, the stock has one recommendation rating of buy with an average target price of $96 per share.

Disclosure: I have no positions in any securities mentioned.

Read more here:



Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

This article first appeared on GuruFocus.