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If you consider yourself a value investor, you may be interested in this list.

We ran a screen on stocks trading under $5/share for those also at the most significant discounts to their Graham Number, potentially indicating that they are undervalued.

The Graham Number is a measure of a stock’s maximum fair value, and it only requires two data points: current earnings per share and current book value per share. 
The Graham Number = Square Root of (22.5) x (TTM Earnings per Share) x (MRQ Book Value per Share). 

This equation assumes that a stock is overvalued if P/E is over 15 or P/BV is over 1.5. Stocks trading at a significant discount to their Graham number may be undervalued.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Click to enlarge

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by Graham number.

1. Casual Male Retail Group, Inc. (CMRG): Operates as a specialty retailer of men's apparel in the United States, Canada and Europe. Market cap of $150.71M. Price (as of market close on 11/25) is at $3.11. TTM Diluted EPS at $0.33, MRQ Book Value Per Share at $2.61, Graham number at $4.40 (vs. current price at $3.16, implies a potential upside of 39.31%). This is a risky stock that is significantly more volatile than the overall market (beta = 3.03). The stock is currently stuck in a downtrend, trading 18.7% below its SMA20, 19.94% below its SMA50, and 24.71% below its SMA200. The stock has performed poorly over the last month, losing 23.21%.

2. ATS Corporation (ATSC): Provides software and systems development, systems integration, information sharing and assurance, information technology (IT) infrastructure and outsourcing, and IT and business consulting services primarily to government agencies in the United States. Market cap of $77.47M. Price (as of market close on 11/25) is at $3.38. TTM Diluted EPS at $0.29, MRQ Book Value Per Share at $2.65, Graham number at $4.16 (vs. current price at $3.14, implies a potential upside of 32.43%). The stock has had a couple of great days, gaining 7.3% over the last week.

3. SeraCare Life Sciences, Inc. (SRLS): Provides products and services to facilitate the discovery, development and production of human and animal diagnostics and therapeutics. Market cap of $52.69M. Price (as of market close on 11/25) is at $2.72. TTM Diluted EPS at $0.29, MRQ Book Value Per Share at $2.05, Graham number at $3.66 (vs. current price at $2.84, implies a potential upside of 28.78%). The stock has lost 30.43% over the last year.

4. Air Transport Services Group, Inc. (ATSG): Provides aircraft, airline operations and other related services primarily to the shipping and transportation industries. Market cap of $288.32M. Price (as of market close on 11/25) is at $4.50. TTM Diluted EPS at $0.34, MRQ Book Value Per Share at $4.92, Graham number at $6.13 (vs. current price at $4.82, implies a potential upside of 27.28%). The stock is currently stuck in a downtrend, trading 14.38% below its SMA20, 10.61% below its SMA50, and 29.45% below its SMA200. It has been a rough couple of days for the stock, losing 13.29% over the last week.

5. Tenet Healthcare Corp. (THC): Operates acute care hospitals and related healthcare facilities. Market cap of $1.81B. Price (as of market close on 11/25) is at $4.17. TTM Diluted EPS at $0.42, MRQ Book Value Per Share at $3.00, Graham number at $5.32 (vs. current price at $4.28, implies a potential upside of 24.40%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.26). The stock is currently stuck in a downtrend, trading 13.76% below its SMA20, 9.13% below its SMA50, and 28.69% below its SMA200. It has been a rough couple of days for the stock, losing 8.15% over the last week.

6. Zix Corporation (ZIXI): Provides Internet-based applications in software as a service model that enables the use of secure email for sensitive information exchange primarily in the healthcare, financial services, insurance and government sectors in the United States. Market cap of $164.34M. Price (as of market close on 11/25) is at $2.49. TTM Diluted EPS at $0.66, MRQ Book Value Per Share at $0.67, Graham number at $3.15 (vs. current price at $2.65, implies a potential upside of 19.03%). The stock is a short squeeze candidate, with a short float at 8.38% (equivalent to 10.47 days of average volume). It has been a rough couple of days for the stock, losing 8.46% over the last week.

7. Mattersight Corporation (MATR): Provides enterprise analytics managed services. Market cap of $72.36M. Price (as of market close on 11/25) is at $4.60. TTM Diluted EPS at $1.18, MRQ Book Value Per Share at $1.20, Graham number at $5.64 (vs. current price at $4.77, implies a potential upside of 18.33%). The stock has lost 28.9% over the last year.

8. Pacer International Inc. (PACR): Operates as an asset-light freight transportation and third-party logistics provider primarily in North America, Asia, Europe, Australia, South America and Africa. Market cap of $136.07M. Price (as of market close on 11/25) is at $3.89. TTM Diluted EPS at $0.34, MRQ Book Value Per Share at $3.24, Graham number at $4.98 (vs. current price at $4.29, implies a potential upside of 16.05%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.02). The stock is a short squeeze candidate, with a short float at 18.61% (equivalent to 26.93 days of average volume). It has been a rough couple of days for the stock, losing 15.8% over the last week.

*Data from 11/24. EPS and BVPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 8 Stocks Trading Under $5 Undervalued By The Graham Number