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A Trio of Large-Cap Stocks Trading Below the Graham Number

GuruFocus.com
·3 min read

- By Alberto Abaterusso

One way to discover value opportunities is to look for stocks that are trading below the Graham Number, as such stocks could be selling at discount to their intrinsic value.

The Graham Number is calculated as the square root of "earnings per share x book value per share x 22.5."

Bank of America Corp


The first stock that makes the cut is Bank of America Corp (NYSE:BAC), a U.S. bank major.

The stock traded at a price of $29.96 per share at close on Thursday, which is below the Graham Number of $30.43, for a price-to-Graham-Number ratio of 0.98.

The stock price has fallen by 15.23% over the past year, determining a market capitalization of $295.18 billion and a 52-week range of $17.95 to $35.67.

A Trio of Large-Cap Stocks Trading Below the Graham Number
A Trio of Large-Cap Stocks Trading Below the Graham Number

GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and of 4 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $30.71 per share.

The company's top fund holder is Warren Buffett with 11.68% of shares outstanding, followed by VANGUARD GROUP INC with 7.09% and BlackRock Inc. with 5.89%.

Toyota Motor Corp

The second stock that makes the cut is Toyota Motor Corp (NYSE:TM), a Japanese automaker.

The stock traded at a price of $150.47 per share at close on Thursday, which is below the Graham Number of $167.89, for a price-to-Graham-Number ratio of nearly 0.90.

The stock price has risen by 6.5% over the past year for a market capitalization of $210.35 billion and a 52-week range of $108.01 to $156.30.

A Trio of Large-Cap Stocks Trading Below the Graham Number
A Trio of Large-Cap Stocks Trading Below the Graham Number

GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and of 6 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average price target of $157.21 per share.

The company's top fund holder is Ken Fisher with 0.29% of shares outstanding, followed by NORTHERN TRUST CORP with 0.10% and Jim Simons with 0.07%.

Citigroup Inc

The third company that makes the cut is Citigroup Inc (NYSE:C), a U.S. bank major.

The stock was trading at a price of $60.57 per share at close on Thursday, which is below the Graham Number of $90.94, for a price-to-Graham-Number ratio of 0.67.

The share price has fallen by nearly 24% in the past year, for a market capitalization of around $126.10 billion. The share price has been fluctuating in a 52-week range of $32 to $83.11.

A Trio of Large-Cap Stocks Trading Below the Graham Number
A Trio of Large-Cap Stocks Trading Below the Graham Number

GuruFocus has assigned a score of 3 out of 10 for the company's financial strength and a score of 4 out of 10 for its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average price target of $69.40 per share.

The company's top fund holder is VANGUARD GROUP INC with 8.15% of shares outstanding, followed by BlackRock Inc. with 7.58% and STATE STREET CORP with 4.28%.

Disclosure: I have no positions in any security mentioned in this article.

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This article first appeared on GuruFocus.