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.
- Analysts' estimates of future business performance.
Huntsman
The first stock investors may want to consider is Huntsman Corp. (HUN, Financial), a manufacturer and marketer of differentiated organic chemicals headquartered in The Woodlands, Texas.
Huntsman’s shares closed at $27.28 apiece on Friday, while its GF Value was $38.56, resulting in a price-to-GF Value ratio of 0.71 and a rating of modestly undervalued. The stock fell marginally year over year, by just 0.55%, determining a market cap of $5.49 billion and a 52-week range of $25.02 to $41.65.
The price-earnings ratio is 4.79 (compared to the industry median of 17.31) and the price-book ratio is 1.36 (versus the industry median of 1.92). Also, the price-sales ratio is 0.65 (compared to the industry median of 1.45) and the price-to-free cash flow ratio is 6.16 (compared to the industry median of 22.15).
GuruFocus has assigned the stock a value rank of 10 out of 10 and a profitability rank of 8 out of 10.
Concerning future business performance, sell-side analysts on Wall Street see earnings rising by 11.26% per annum over the next five years. This year they are expected to increase by 23.20% compared to 2021.
Lennar
The second stock investors may want to consider is Lennar Corp. (LEN, Financial), a Miami-based homebuilder. The company's residential construction activities include the construction and sale of single-family and detached houses, as well as the purchase, development and sale of residential land and multi-family housing. It also offers financing, insurance and investment activities. It primarily serves first-time buyers, move-up and active adult buyers and luxury home buyers.
Lennar’s shares closed at $79.82 apiece on Friday, while its GF Value was $108.97, resulting in a price-to-GF Value ratio of 0.73 and a rating of modestly undervalued. The share price has declined by 19.71% over the past year for a market capitalization of $22.66 billion and a 52-week range of $62.54 to $117.54.
The price-earnings ratio is 5.52 (compared to the industry median of 8.01) and the price-book ratio is 1.09 (versus the industry median of 0.96). The price-sales ratio is 0.8 (compared to the industry median of 0.77) and the price-to-free cash flow ratio is 13.45 (compared to the industry median of 11.27).
GuruFocus has assigned the stock a value rank of 10 out of 10 and a profitability rank of 9 out of 10.
Concerning future business performance, sell-side analysts on Wall Street see earnings rising by 23.70% per annum over the next five years. This year they are expected to increase by 15.40% compared to 2021.
The Hartford
The third stock investors may want to consider is The Hartford Financial Services Group Inc. (HIG, Financial), a Hartford, Connecticut-based insurer and financial services provider in the U.S. and overseas.
The Hartford’s shares closed at $67.02 apiece on Friday, while its GF Value was $69.99, resulting in a price-to-GF Value ratio of 0.96 and a rating of fairly valued. The share price has dropped by 4.69% over the past year for a market capitalization of $21.66 billion and a 52-week range of $61.59 to $78.17.
The price-earnings ratio is 11.12 (compared to the industry median of 11.81), the price-book ratio is 1.58 (versus the industry median of 1.16), the price-sales ratio is 1.08 (compared to the industry median of 1.05) and the price-to-free cash flow ratio is 6.19 (compared to the industry median of 6.71).
GuruFocus has assigned the stock a value rank of 6 out of 10 and a profitability rank of 6 out of 10.
Concerning future business performance, sell-side analysts on Wall Street see earnings rising by 13.73% per annum over the next five years. This year, an increase of 19.20% is expected.
