When looking for bargain opportunities, value investors may want to consider the following securities since their share prices are trading near or below the intrinsic value estimated by the GF Value Line.
The GF Value is a unique intrinsic value calculation from GuruFocus that is made up of three components:
- The stock's historical multiples, such as the price-earnings ratio, the price-sales ratio, the price-book ratio and the price-to-free cash flow ratio.
- A GuruFocus adjustment factor based on the past returns and growth of the company's business.
- Analyst estimates of future business performance.
Ternium
The first stock investors may want to consider is Ternium SA (TX, Financial), a Luxembourg-based producer of various steel products primarily for sale in the U.S. and Mexico.
Ternium’s shares closed at $38.51 apiece on Wednesday while its GF Value was $39.14, resulting in a price-to-GF Value ratio of 0.98 and a rating of fairly valued. The stock has risen by 28.59% over the past year, determining a market capitalization of $7.36 billion and a 52-week range of $28.12 to $58.86.
The price-earnings ratio is 2.14 (compared to the industry median of 8.23) and the price-book ratio is 0.77 (versus the industry median of 1.11). The price-sales ratio is 0.52 (compared to the industry median of 0.55) and the price-to-free cash flow ratio is 5.35 (versus the industry median of 10.12).
GuruFocus has assigned the stock a profitability rating of 7 out of 10.
Concerning the future business performance, sell-side analysts on Wall Street see earnings rising over the next five years.
Reinsurance Group of America
The second stock investors may want to consider is Reinsurance Group of America Inc. (RGA, Financial), a Chesterfield, Missouri-based reinsurance company serving life insurance companies in the United States and internationally.
Reinsurance Group of America’s shares closed at $117 apiece on Wednesday while its GF Value was $133.92, resulting in a price-to-GF Value ratio of 0.87 and a rating of modestly undervalued. The share price has declined by 4.90% over the past year for a market capitalization of $7.7 billion and a 52-week range of $94.32 to $134.93.
The price-earnings ratio is 12.7 (compared to the industry median of 11.65) and the price-book ratio is 0.59 (versus the industry median of 1.21). The price-sales ratio is 0.47 (compared to the industry median of 1.28) and the price-to-free cash flow ratio is 1.79 (compared to the industry median of 8.29).
GuruFocus has assigned the stock a profitability rating of 6 out of 10.
Concerning the future business performance, sell-side analysts on Wall Street predict the earnings per share will increase by 21.09% annually over the next five years.
