Are you familiar with the dynamic duo of Fama and French? No, they didn't star in Tommy Boy -- that was Farley and Spade. And they didn't perform the "Time Machine" skit -- that was Slovin and Allen.

While the names Eugene Fama and Kenneth French may not come up in most dinner conversations, the two have done some very interesting academic research on stocks. In short, they've proposed that there's more to stock returns than volatility -- which was 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 nonvalue stocks.

Today, I've rounded up five value stocks trading at less than two times their book value. You can run the same screen in CAPS for updated results. To focus on high-quality stocks, I've cross-referenced these against ratings in our CAPS community of more than 140,000 investors.

Company

Book Value Multiple

1-Year Change

CAPS Rating
(out of 5)

Yamana Gold (NYSE:AUY)

1.1

43%

****

Activision Blizzard (NASDAQ:ATVI)

1.3

(34%)

*****

Markel (NYSE:MKL)

1.3

(12%)

*****

Chesapeake Energy (NYSE:CHK)

1.4

(35%)

*****

Nuance Communications (NASDAQ:NUAN)

1.9

(4%)

****

Data from CAPS, Capital IQ (a division of Standard & Poor's), and Yahoo! Finance as of Sept. 11.

While these aren't formal recommendations, the CAPS community thinks that they are good choices when it comes to value stocks. With that I mind, I thought I'd dig in a little further on Motley Fool Inside Value favorite Markel.

Where's the value?
If you were to break Berkshire Hathaway (NYSE:BRK-A) in half, you'd probably end up with a collection of insurance companies on one side and a conglomerate of operating businesses on the other. Both are equally important in making Berkshire Hathaway what it is, but when investors refer to Markel as a "baby Berkshire" they're comparing it to the former chunk of the company.

Insurance companies hang onto a portion of the premiums they collect in order to cover policy payouts. This "float" can be invested to earn returns on what can basically end up being interest-free loans.

The beauty of Warren Buffett and Berkshire is that the company conservatively underwrites its policies -- which typically keeps the company from having to pay out more on its policies than it collects in premiums -- and it has a truly great investor investing its float.

There's a similar situation going on at the lesser-known Markel, which was started in the 1920s to insure jitney buses. It has been insuring specialty risks like high-value motorcycles, horses, and liabilities for highly specialized professionals ever since. A sign of the company's effective underwriting policies is the consistent track record of keeping its combined ratio around or under 100%.

And then there's the matter of Tom Gayner; the company's chief investment officer has put up quite a fine track record of investing Markel's float. For the 10 years ending in 2008, Gayner's equity returns averaged 3.6% per year. Now that may not sound like much, but when you consider that the S&P 500 lost more than a quarter of its value over that same time frame, it sounds pretty darn good.

Right now, Gayner has Markel invested in companies similar to Markel, like Berkshire and Fairfax Financial, as well as some large positions in CarMax, Diageo, and General Electric (NYSE:GE).

But will it beat the market?
You'll get a pretty resounding "yes" if you pose this question to the CAPS community. More than 2,600 CAPS members have weighed in on Markel's stock, and 2,606 of them have called the stock an outperformer.

CAPS member athenamike joined the bullish chorus back in May and said:

Excellent insurance underwriting and excellent investing make Markel a great long term growth company. The insurance market is hardening and future investment returns, although bumpy in the short term, should look much better. I expect book value growth of around 10-15% per share and a future price to book of 1.5x to 2x versus current 1.2x.

So what do you think? Are the stocks in this group values, or value traps? Log onto CAPS and let the 140,000-member community know what you think.

More CAPS Foolishness:

Activision Blizzard and Berkshire Hathaway are Motley Fool Stock Advisor recommendations. Berkshire Hathaway, Chesapeake Energy, and Markel are Motley Fool Inside Value picks. Nuance Communications is a Motley Fool Hidden Gems selection. The Fool owns shares of Berkshire Hathaway, Chesapeake Energy, and Markel. Try any of our Foolish newsletters today, free for 30 days

Fool contributor Matt Koppenheffer owns shares of Berkshire Hathaway, but does not own shares of any of the other companies mentioned in this article. He is keeping an eye on some of them through his CAPS portfolio. You can connect with Matt on Twitter @KoppTheFool. The Fool's disclosure policy wouldn't know a value trap from a hole in the wall, but then again, the disclosure policy is just an inanimate collection of words.