One potential way to unearth value opportunities is to screen for stocks trading below the Graham Number, as such stocks could be undervalued.
The Graham Number, which is an estimate of the intrinsic value for each share of a stock, is calculated as the square root of "earnings per share x book value per share x 22.5"
John Hancock Income Securities Trust
The first stock that qualifies is John Hancock Income Securities Trust (JHS, Financial), a Boston, Massachusetts-based asset management company focusing on U.S. fixed income markets.
The stock was trading at a price of $15.30 per share at close on Monday and has a Graham Number of 19.37.
The stock price has risen 5.52% over the past year, determining a market capitalization of $178.19 million and a 52-week range of $10.30 to $15.71.
GuruFocus has assigned a score of 6 out of 10 for the company's financial strength and a score of 2 out of 10 for its profitability.
As of August, one sell-side analyst on Wall Street recommends buying shares of John Hancock Income Securities Trust.
With 12.98% of shares outstanding, SIT INVESTMENT ASSOCIATES INC is the company's top fund holder, followed by 1607 Capital Partners, LLC with 8.51% and WELLS FARGO & COMPANY/MN with 4.16%.
Minerals Technologies Inc
The second stock that has the above criteria is Minerals Technologies Inc (MTX, Financial), a New York-based producer and marketer of a broad range of specialty mineral products.
The stock was trading at a price of $52.75 per share at close on Monday, which is significantly below the Graham Number of 69.57.
The stock price has risen 8.43% over the past year for a market capitalization of $1.8 billion and a 52-week range of $27.28 to $59.18.
GuruFocus has assigned a score of 5 out of 10 for the company's financial strength and a score of 7 out of 10 for its profitability.
As of August, Wall Street sell-side analysts issued three buy recommendation ratings and two hold recommendation ratings for shares of Minerals Technologies Inc and have produced an average target price of $59.50 per unit.
The company's top fund holder is BlackRock Inc. with 11.53% of shares outstanding, followed by VANGUARD GROUP INC with 9.85% and PRICE T ROWE ASSOCIATES INC /MD/ with 8.46%.
Nuveen Select Tax Free Income Port 3
The third stock that meets the criteria is Nuveen Select Tax Free Income Port 3 (NXR, Financial), a Chicago-based asset management company investing in U.S. fixed income securities.
The stock was trading at a price of $16.49 per share at close on Monday, which is below the Graham Number of 22.77.
The share price has risen nearly 4% in the past year, fluctuating in a 52-week range of $12.99 to $17.13. The stock has a market capitalization of $215.12 million.
GuruFocus has assigned a score of 7 out of 10 for the company's financial strength and a score of 2 out of 10 for its profitability.
The company's top fund holder is 1607 Capital Partners, LLC with 3.30% of shares outstanding, followed by UBS Group AG with 2.47% and WELLS FARGO & COMPANY/MN with 1.80%.
Disclosure: I have no positions in any security mentioned in this article.
Read more here:
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- A Trio of Stocks with Low Shiller Price-Earnings Ratios
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