Though value investors have been some of the most successful investors out there, finding good stocks at bargain prices is far from easy. Markets aren't as efficient as some university professors will tell you, but they generally do a pretty good job pricing stocks. So while there are good deals out there, you'll have to break a bit of a mental sweat if you want to make sure that you're investing in the stock equivalent of Brad Pitt, rather than Carrot Top.
Fortunately for us, our search for stock market values gets some much needed assistance from the 125,000 members of The Motley Fool's CAPS community. Our phalanx of Fools cast their votes on which stocks are true stars, and which are just posers. To gather some ideas, I've dug up a handful of companies valued at less than twice their book value -- a measure often used by value investors. Below is a selection from the array of companies that fall into this category; you can also run the same screen that I did, but remember that your results may differ from mine as the market changes.
|
Company |
Book Value |
1-Year Stock |
CAPS Rating
|
|---|---|---|---|
|
Hartford Financial |
0.3 |
(84%) |
** |
|
YRC Worldwide |
0.4 |
(83%) |
** |
|
Disney |
1.1 |
(38%) |
**** |
|
Transocean |
1.2 |
(51%) |
***** |
|
Gap |
2.0 |
(35%) |
* |
Source: Capital IQ, a division of Standard & Poor's, Yahoo! Finance, and CAPS as of Feb. 6.
As you can see, though these stocks all carry value-like multiples, the CAPS community obviously doesn't think that all are equally worthy of your investment dollars.
No twinkle in these stars
It's no secret that some of the very largest U.S. financial institutions are about as solid as a bowl of pudding. In fact, my Foolish colleague Morgan Housel thinks that Citigroup
Meanwhile, in the trucking industry, YRC Worldwide is showing investors that you don't have to be in the business of finance to get caught under the weight of a heavy debt burden. The company has recently been caught between the Scylla of slumping demand for trucking services, and the Charybdis of a $1 billion-plus debt. Though YRC has been tightening screws on the business' expenses, the CAPS community doesn't seem to have much faith in a positive outcome.
And while I still find Gap jeans a good fit for me, many CAPS members seem to think the stock is way out of style. Of course, Gap isn't alone among retailers warming the CAPS bench -- other high-profile clothiers like Aeropostale and Abercrombie & Fitch are also scraping the bottom of the barrel when it comes to CAPS ratings.
A five-star is born!
Disney may not have been able to get it done in its most recent quarter, but the stock is still riding a respectable four-star rating on CAPS. Most CAPS members who have weighed in like the overall quality of the company, along with the improved leadership from CEO Bob Iger. Caligiuri, a member who recently got bullish on Disney, kept the commentary short and sweet, calling Disney a "great company at a good price."
As well-liked as Disney is, though, its four-star rating couldn't quite get it past this week's top value stock, Transocean. Similar to competitors such as National Oilwell Varco
You really have no choice but to own some oil and gas related stocks, because we all know we'll see $4 a gallon again at some point. I think this stock is one of the best to hold onto. I don't know what we'll see in the short term, but I don't doubt in 5 years it will be beating the market.
Make your vote count!
Do you agree that Transocean could be America's next top value stock? Click over to CAPS and let the rest of the community know what you think. And while you're there, you can log your vote for the other stocks that you think should be in the running.
More CAPS lovin' Foolishness:
- 5 Dynamic Dividend Stocks
- Warren Buffett is a Growth Investor
- Do You Know What These Investors Know?
