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- By Alberto Abaterusso
In my opinion, choosing U.S.-listed securities that have the following characteristics represents a solid starting point when looking for potential value opportunities:
The shares are trading near or below their historical median valuations.
The return on invested capital (ROIC) surpasses the weighted average cost of capital (WACC), which suggests the company is creating value for shareholders.
The stock holds optimistic recommendation ratings on Wall Street.
Thus, investors may want to consider the following stocks, as they meet the above criteria.
Herbalife Nutrition Ltd
The first company that meets the criteria is Herbalife Nutrition Ltd (NYSE:HLF), a Los Angeles, California-based provider of nutrition solutions in North America and internationally.
The share price ($44.87 as of April 9) is slightly above the Peter Lynch earnings line ($41.55) and the median historical valuation line ($44.52), as the chart below shows.
The stock has a market capitalization of $5.30 billion and a 52-week price range of $29.64 to $59.
Herbalife Nutrition Ltd has a ROIC of 31.5%, which is more than four times the WACC of 6.8%.
As of April, the stock has a median recommendation rating of buy with an average target price of $69.67 per share on Wall Street.
Thryv Holdings Inc
The second stock that qualifies is Thryv Holdings Inc (NASDAQ:THRY) Texas-based provider of print and digital marketing solutions as well as software and service business management solutions to small-to-medium sized enterprises in the United States.
The share price ($23.50 as of April 9) is below the Peter Lynch earnings line ($61.73) and the median historical valuation line ($39.08), as the chart below exhibits.
The stock has a market capitalization of $778.50 million and a 52-week range of $8.10 to $30.
Thryv Holdings Inc has a ROIC of 338.71%, which is many times the WACC of 13.82%.
On Wall Street, as of April, the stock has a median recommendation rating of buy and an average target price is $38 per share.
Antares Pharma Inc
The third stock that meets the criteria is Antares Pharma Inc (NASDAQ:ATRS), an, New Jersey-based specialty pharmaceutical developer of products and technologies targeting several unmet medical needs.
The share price of $4.10 (as of April 9) is trading below the Peter Lynch earnings line ($4.95) and the median historical valuation line ($22.52), as the chart below illustrates.
The stock has a market capitalization of $689.46 million and a 52-week price range of $2.11 to $5.07.
Antares Pharma Inc has a ROIC of 108.82%, which is more thaneight times the WACC of 13.33%.
On Wall Street, as of April, the stock has a median recommendation rating of buy and an average target price of $6.80 per share.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.