Nine Value Companies to Watch

All companies listed below met The Applied Finance Group's (AFG's) Buy screen criteria and are in the bottom half of their sector in Market Value/Invested Capital (MV/IC), which by definition qualifies the companies as part of the AFG Value Universe. When identifying buy ideas, AFG looks for companies with the most valuation upside compared to their sector peers, above sector median expected Economic Margin change, and a management quality score that reflects a management team following a wealth creating strategy.

click to enlarge

9 Value Companies To Watch

A brief description of AFG's buy criteria variables:

AFG's Valuation Metric – Measures the percent to target (deviation between a stock’s current trading price and its AFG current default target price). To derive the intrinsic value of a firm, AFG uses its proprietary Valuation Model (modified discounted cash flow model).

Economic Margin - A corporate performance measurement that addresses the gaps in GAAP, eliminating distortions caused by accounting policies to measure what a company is truly earning above or below their cost of capital.

Management Quality– Assesses management’s ability to make wealth creating decisions.

AFG's Value Universe - Companies in the AFG universe, which have MV/IC at the bottom 50% of the universe and have EPS estimates.

Market Value/Invested Capital (MV/IC) - The firm's average total equity, debt and other obligations divided by net invested capital.

Comments

[Graham Jervis:]

well, this is comforting as i saw value in WAT, SGP and BMY for quite some time now. thanks for the other ideas, will due some due diligence on the rest.

Jun 10 09:11 AM

[woodsey:]

Useful; thank you.

Jun 10 04:59 PM

[weiwentg:]

it's interesting to note that Waters and IMS Health are in fact healthcare-related companies. Waters produces mass spectrometers - capital goods for pharma companies. IMS collects pharmacy benefit info.

Jun 29 05:20 PM