Value Screeners Identify Opportunities for 2nd Quarter

As the stock market continues hitting new record highs to begin the second quarter, investors may wonder if value investing opportunities still exist.

GuruFocus' value screeners, a Premium feature, identifies stocks that meet the criteria from investing strategies based on value legends like Benjamin Graham, Peter Lynch and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio).

U.S. markets receive post-Easter boost on strong March job growth, Dow sets new record close

On Monday, the day after Easter, the Dow Jones Industrial Average set a new record close of 33,527.19, up 373.98 points, on the heels of strong job growth in March. The Labor Department said on Friday that total nonfarm payrolls increased by 916,000 during the month, smashing the Dow Jones forecast of 675,000 jobs added and representing the largest one-month increase of jobs since August 2020.

The Dow's surge comes following the Standard & Poor's 500 Index topping 4,000 on Thursday, for the first time in the S&P 500's history. Stocks continued rallying on the news of President Biden's $2 trillion infrastructure proposal from early last week.

Ben Graham Net-Net Screen

Graham wrote in his book, "The Intelligent Investor," that the idea behind his investing strategy is to seek stocks that trade below 66% of their net current asset value, which is defined as current assets minus total liabilities. Alternatively, the stock must trade below 66% of net-net working capital, which equals the sum of cash and short-term investments, 75% of accounts receivable and 50% of total inventory less total liabilities.

Table 1 lists the number of net-nets for each GuruFocus region.

Table 1

Undervalued-Predictable and Buffett-Munger

As the name suggests, the Undervalued-Predictable Screener lists the stocks that have strong and consistent revenue and earnings growth over the past 10 years and are trading below their discount cash flow valuation.

The Buffett-Munger Screener extends the Undervalued-Predictable Screener by considering four key criteria of "good companies at fair prices" according to the co-managers of Berkshire: understandable business, favorable growth prospects, honest and competent management and attractive valuation.

Table 2 lists the number of Undervalued-Predictable and Buffett-Munger stocks for each GuruFocus region.

Table 2

Peter Lynch

The Peter Lynch Screen applies the Fidelity Magellan Fund manager's concept in which an undervalued stock trades below 15 times its earnings per share. Table 3 lists the number of Peter Lynch stocks for each GuruFocus region.

Table 3

See also

Table 4 reports the number of stocks of each of the remaining most-popular value screens under the GuruFocus "Screeners" tab, which include the 52-week Lows Screen, the 52-week Highs Screen, the Historical Low Price-Book Screen and the Historical Low Price-Sales Screen.

Table 4

Disclosure: No positions.

Read more here:

• S&P 500 Tops 4,000 to Begin 2nd Quarter
• Leith Wheeler Canadian Equity Fund's Top 5 Trades in 2nd Half of 2020
• 4 Industrial Companies With High Returns on Equity Over Past 5 Years

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