Undervalued share prices falling below most conservative valuation metrics may - or may not - present investment opportunities
- Sectors falling out of favor for good reasons may sanction individual companies unfairly
- Poor company results may be written off by the market prematurely
Applying a valuation metric devised by value investor Benjamin Graham, fundamental analysis is focused on two parameters, price to earnings (<=15) and book value per share (<1.5), setting upward boundaries for fair value
With the Graham multiplier, this tentative 'fair price' for a stock is based on the geometric mean between the maximum price based on earnings and the maximum price based on book value, giving equal weight to both factors
To assess potential under- or overvaluation based on these rules, within the sector of Industrial Goods, each stock's current price is divided by its Graham multiplier
The selection lists the smallest ratios, with stock price below - or closely aligned with - the Graham valuation metric - implying undervaluation of the stocks according to the Graham rule
For evaluation of this dynamically generated and continuously updated selection, the analytics tab of the list facilitates ranking by P/E (favoring moderate ratios), dividend yield and enterprise value (EV) ratios
Explorer screens the Pininvest data base dynamically by market cap, performance, volatility and accounting fundamentals
Selections will reflect share price movements and quarterly accounting updates
Investors are free to bookmark stocks of interest, to invest in their virtual portfolio and to download fact sheets