A Trio of Picks Trading Below the Graham Number
If you screen the U.S. market for stocks trading below the Graham Number, which is an estimate of intrinsic value, you will have a higher chance to identify bargains, as such stocks are likely to be undervalued.
The Graham Number is calculated as the square root of "earnings per share x book value per share x 22.5 x 1.5."
Chubb Ltd
The first stock that meets the criteria is Chubb Ltd (NYSE:CB), a Swiss insurer and reinsurer which provides its financial products globally.
The stock traded at a price of $131.94 per share at close on Wednesday and has a Graham Number of 144.34.
The share price has fallen by 13.7% in the past year, determining a market capitalization of $59.55 billion and a 52-week range of $87.35 to $167.74.
GuruFocus has assigned a score of 4 out of 10 for the company's financial strength and a score of 5 out of 10 for its profitability.
Wall Street sell-side analysts recommend an overweight rating for shares of Chubb Ltd and have produced an average target price of $142.76 per unit.
The company's top fund holder is VANGUARD GROUP INC with 8.55% of shares outstanding, followed by BlackRock Inc. with 7.11% and WELLINGTON MANAGEMENT GROUP LLP with 5.28%.
Citizens Holding Co
The second stock that meets the criteria is Citizens Holding Co (NASDAQ:CIZN), a Philadelphia, Mississippi-based holding company for The Citizens Bank of Philadelphia, a provider of various banking products and services to individuals and businesses.
The stock traded at a price of $22.19 per share at close on Wednesday, which is below the Graham Number of 22.88.
The stock price has risen 4.6% over the past year, fluctuating in a 52-week range of $16.02 to $27.94. The stock has a market capitalization of $124.05 million.
GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and a score of 3 out of 10 for its profitability.
Wall Street sell-side analysts issued a hold recommendation rating for shares of Citizens Holding Co and have set an average target price of $24 per unit.
With 3.3% of shares outstanding, MAGNOLIA CAPITAL ADVISORS LLC is the company's top fund holder, followed by BancorpSouth Bank with 1.5% and KENNEDY CAPITAL MANAGEMENT, INC. with 1.27%.
Foot Locker Inc
The third stock that qualifies is Foot Locker Inc (NYSE:FL), a New York-based footwear and accessories company.
The stock traded at a price of $30.97 per share at close on Wednesday, which is below the Graham Number of 31.24.
The stock price has fallen by 24.6% over the past year for a market capitalization of $3.23 billion and a 52-week range of $17.46 to $63.58.
GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and 8 out of 10 for its profitability.
Wall Street sell-side analysts issued an overweight recommendation rating for shares of Foot Locker Inc and have established an average target price of $29.59.
The company's top fund holder is VANGUARD GROUP INC with 9.66% of shares outstanding, followed by BlackRock Inc. with 9.32% and Boston Partners with 8.43%.
Disclosure: I have no positions in any security mentioned in this article.
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This article first appeared on GuruFocus.
