Seeking Alpha
Value, growth at reasonable price, deep value, contrarian
Profile| Send Message|
( followers)  

Book value is one of the ways value investors evaluate stocks before making an investment. The book value (also sometimes called net asset value) is considered to be the total value of the company's assets that a shareholder would receive if the company were liquidated. Value investors generally believe that stocks selling for less than book value could be solid investments since the market is currently undervaluing the assets. Most stocks sell for more than book value and often stocks that sell below book value can rebound over time. Sometimes companies sell for below book value due to serious challenges to their business model, so it's important to consider all aspects before investing. All of these stocks have dropped in value lately and might be offering a buying opportunity for long-term investors. Here are a few companies that are selling below book value:

Hartford Financial Services (NYSE:HIG) is a leading insurance company and also offers other financial products both in the USA and globally. Recently, Hartford announced that 2nd quarter profits would be well below expectations due to asbestos litigation and losses from major storms. This lower-than-expected profit has caused the shares to drop and has created a great buying opportunity for longer-term investors.

Here are some key points for HIG:

Current share price: $23.59

The 52 week range is $18.81 to $31.08

Earnings estimates for 2011: $3.71 per share

Earnings estimates for 2012: $4.02 per share

Annual dividend: 40 cents per share which yields 1.6%

Book value: $45.93 per share
Chimera Investment Corporation (NYSE:CIM) is a real estate investment trust (REIT) that invests in residential mortgage-backed securities, and both commercial and residential mortgage loans. Many stocks in this sector have fallen lately due to news they would raise capital. Chimera has not announced plans to raise capital, so it appears to be unfairly punished by the markets. With a 16% yield and a share price below book value, this looks like a great buying opportunity.
Here are some key points for CIM: Current share price: $3.20 The 52 week range is $3.09 to $4.36 Earnings estimates for 2011: 60 cents per share Earnings estimates for 2012: 59 cents per share Annual dividend: 52 cents per share which yields 16%
Book value: $3.45 per share

Phoenix Companies, Inc. (NYSE:PNX) offers annuities and life insurance products in the United States. This company is facing some challenges such as slow sales but it has a book value of nearly 4 times the current stock price. This is a higher risk, higher reward stock. It's possible a larger insurance company could have an interest in buying Phoenix in the future.

Here are some key points for PNX: Current share price: $2.41 The 52 week range is $1.61 to $2.86 Earnings estimates for 2011: 42 cents per share

Earnings estimates for 2012: 39 cents per share

Book value: $9.86 per share

Nokia (NYSE:NOK) is a leading maker of mobile phones and other devices. This company is facing serious competition from many sources and the stock has been reflecting a very bleak outlook for any type of growth. The stock looks cheap but it's hard to see what catalysts could turn this company around. One concern is that the earnings estimates for the next couple of years are below the annual dividend. This could force the company to cut the dividend, so I would only watch this stock for now.

Here are some key points for NOK: Current share price: $5.33 The 52 week range is $5.31 to $11.75 Earnings estimates for 2011: 29 cents per share Earnings estimates for 2012: 40 cents per share
Annual dividend: 48 cents per share which yields 8.9%
Book value: $5.39 per share
Vantage Drilling Company (NYSEMKT:VTG) offers offshore contract drilling services to oil and natural gas companies. The Vantage fleet includes four ultra-premium jack up rigs, three ultra-deep water drill ships, and two deep water semi submersibles.This is a small company compared with many other drillers and it is relatively new. The debt load seems to weigh on these shares and hold back profits. If the stock drops from these levels, it could be an interesting speculation.
Here are some key points for VTG: Current share price: $1.68

The 52 week range is $1.04 to $2.26

Earnings estimates for 2011: a loss of 10 cents per share

Earnings estimates for 2012: a profit of 2 cents per share

Book value: $2.60 per share

Data sourced from Yahoo Finance.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: 5 Beaten Up Book Value Bargains