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Do you consider yourself a value investor? We ran a screen with this idea in mind.

We began by screening the services sector for stocks that have outperformed the market over the last quarter, with quarterly performance above 20%.

Then we screened that universe for those that appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing" Benjamin Graham.

It is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

(click to enlarge)

Tool provided by Kapitall (www.kapitall.com). More investing ideas on Kapitall Wire (wire.kapitall.com).

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 the Graham Number.

1. SIRIUS XM Radio Inc. (NASDAQ:SIRI): Provides satellite radio services in the United States and Canada. Market cap at $9.81B, most recent closing price at $2.56. Performance over the last quarter at 31.61%. Diluted TTM earnings per share at 0.54, and a MRQ book value per share value at 1.05, implies a Graham Number fair value = sqrt(22.5*0.54*1.05) = $3.57. Based on the stock's price at $2.56, this implies a potential upside of 39.52% from current levels.

2. Fisher Communications, Inc. (FSCI): An integrated media company, through its subsidiaries, engages in television and radio broadcasting businesses. Market cap at $298.46M, most recent closing price at $33.61. Performance over the last quarter at 20.57%. Diluted TTM earnings per share at 4.14, and a MRQ book value per share value at 23.08, implies a Graham Number fair value = sqrt(22.5*4.14*23.08) = $46.37. Based on the stock's price at $33.24, this implies a potential upside of 39.49% from current levels.

3. PC Connection, Inc. (NASDAQ:PCCC): Operates as a direct marketer of various information technology solutions. Market cap at $321.63M, most recent closing price at $12.16. Performance over the last quarter at 34.89%. Diluted TTM earnings per share at 1.17, and a MRQ book value per share value at 10.88, implies a Graham Number fair value = sqrt(22.5*1.17*10.88) = $16.92. Based on the stock's price at $12.45, this implies a potential upside of 35.93% from current levels.

4. PharMerica Corporation (NYSE:PMC): Operates as an institutional pharmacy services company in the United States. Market cap at $374.15M, most recent closing price at $12.67. Performance over the last quarter at 21.65%. Diluted TTM earnings per share at 0.87, and a MRQ book value per share value at 14.55, implies a Graham Number fair value = sqrt(22.5*0.87*14.55) = $16.88. Based on the stock's price at $12.86, this implies a potential upside of 31.23% from current levels.

5. Gannett Co., Inc. (NYSE:GCI): Operates as a media and marketing solutions company in the United States and internationally. Market cap at $3.55B, most recent closing price at $15.32. Performance over the last quarter at 20.67%. Diluted TTM earnings per share at 1.69, and a MRQ book value per share value at 10.22, implies a Graham Number fair value = sqrt(22.5*1.69*10.22) = $19.71. Based on the stock's price at $15.68, this implies a potential upside of 25.72% from current levels.

6. Entercom Communications Corp. (NYSE:ETM): Operates as a radio broadcasting company in the United States. Market cap at $250.32M, most recent closing price at $6.50. Performance over the last quarter at 24.04%. Diluted TTM earnings per share at 0.38, and a MRQ book value per share value at 6.79, implies a Graham Number fair value = sqrt(22.5*0.38*6.79) = $7.62. Based on the stock's price at $6.47, this implies a potential upside of 17.76% from current levels.

*BVPS and EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 6 Outperforming Services Stocks Undervalued By The Graham Number