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5 Top-Rated Value Stocks

Are you familiar with the dynamic duo of Fama and French? No, they didn't sing "Private Eyes" -- that was Hall and Oates. And no, they didn't star in Tommy Boy -- that was Farley and Spade.

While the names Eugene Fama and Kenneth French may not come up in most dinner conversations, the two have done some of the most interesting academic research on stocks that I've read. In short, they've proposed that there's more to stock returns than volatility -- which was most academics' previous consensus. In research they conducted over various periods and across multiple geographic locations, Fama and French determined that stocks characterized as "value stocks" have consistently outperformed non-value stocks.

Today, I've rounded up five value stocks that are all trading at less than 1.5 times their tangible book value. To focus on high-quality stocks, I've cross-referenced these against ratings in our CAPS community of more than 86,000 investors.


Tangible Book Value Multiple

1-Year Change

CAPS Rating

Excel Maritime (NYSE: EXM  )




Toyota Motor (NYSE: TM  )




Coeur d'Alene Mines (NYSE: CDE  )




Kookmin Bank (NYSE: KB  )




Ceragon Networks (Nasdaq: CRNT  )




Data from CAPS, Yahoo! Finance, and Capital IQ as of March 21.

Though the CAPS community obviously likes these stocks, I would advise against investing in any of these on the basis of this one metric alone. With that I mind, I thought I'd dig in a little further to the story at Excel Maritime.

Rethinking dry bulk
In late 2007, dry bulk shippers were feeling pretty good. Led by the seemingly unsinkable DryShips (Nasdaq: DRYS  ) , the stocks of the dry bulk shippers were at one point trading at multiples of where they started 2007. It's been a long, hard fall since then, and DryShips is off 56% from its 52-week high, while Excel is down an even more painful 67%.

Some highly ranked members of the CAPS community saw this coming. Allstar13913 gave Excel a thumbs-down back in November, saying, "The entire dry bulk shipping sector is inflated, and I believe it will come down to earth soon." That has certainly happened at this point.

But now Excel is trading at just 6.7 times its 2007 earnings per share and 3.9 times its expected 2008 EPS, and the stock is yielding 3%. The company recently announced strong fourth-quarter results that showed dayrates up more than 30% from the prior quarter and profit that was well above what Wall Street was expecting.

Many CAPS players now think it's time to start looking at this group again. CAPS All-Star UncommonSense rated Excel an outperformer last week and said:

[Excel is] only trading at 6x earnings. Real earnings are driving these dry bulk carriers-not rampant speculation [like oil and gold]. 6x is very very reasonable for this industry [in fact,] I think 15-20x is reasonable given its growth.

So what do you think? Are these stocks values, or value traps? Log onto CAPS and let the rest of the 86,000 member community know what you think.

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Related Tickers

12/31/1969 7:00 PM
EXMCQ.DL $0.00 Down +0.00 +0.00%
Excel Maritime Car… CAPS Rating: ****
CDE $11.17 Down -0.14 -1.24%
Coeur Mining CAPS Rating: **
CRNT $2.64 Down -0.04 -1.49%
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DRYS $0.36 Down -0.03 -7.23%
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KB $37.28 Up +0.45 +1.22%
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