3 Capital-Intensive Stocks for the Value Investor
- By Alberto Abaterusso
When screening capital-intensive markets for value opportunities, one strategy investors may want to consider is to look for stocks whose price-to-tangible-book-value ratios are more compelling than their peers.
The price-to-tangible-book-value ratio is preferred to the price-book ratio for these companies, as the assessment of their businesses mainly stems from tangible assets.
Star Bulk Carriers Corp.
The first stock that meets the criteria is Star Bulk Carriers Corp. (NASDAQ:SBLK), a Marousi, Greece-based marine shipping company of dry bulk cargoes worldwide.
Star Bulk Carriers has a price-to-tangible-book-value ratio of 0.72, which is more compelling than the industry median of 1.32 and ranks higher than 73% of the 802 competitors that operate in the transportation industry.
The share price was $11.17 per share as of Jan. 21. The tangible book value per share was approximately $15.55 as of the June 2020 quarter.
The stock price increased by 18.45% over the past year, determining a market capitalization of $1.07 billion and a 52-week range of $3.86 to $12.22.
GuruFocus assigned a score of 3 out of 10 for both the company's financial strength rating and its profitability rating.
On Wall Street, the stock's median recommendation rating is between buy and strong buy, while the average target price is $10.83 per share.
Caesarstone Ltd
The second stock that qualifies is Caesarstone Ltd (NASDAQ:CSTE), a Menashe, Israel-based manufacturer of engineered quartz surfaces.
Caesarstone's price-to-tangible-book-value ratio of 1.03 is more appealing than the industry median of 1.20, ranking higher than 58% of 1,388 companies that operate in the construction industry.
As of Jan. 21, the stock price was $13.76 per share, while the tangible book value per share was $13.38 as of the recent quarter.
The stock has declined by 7.88% over the past year for a market capitalization of $473.82 million and a 52-week range of $7.65 to $15.00.
GuruFocus assigned a score of 7 out of 10 to both the financial strength rating and the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of hold with an average target price of $16 per share.
Ramaco Resources Inc
The third stock that makes the cut is Ramaco Resources Inc (NASDAQ:METC), a Lexington, Kentucky-based producer of metallurgical coal.
Ramaco Resources' price-to-tangible-book-value ratio of 0.77 appeals more than the industry median of 0.97, ranking higher than 60% of 557 companies that operate in the steel industry.
The stock price was trading at $3.13 per share as of Jan. 21, while the tangible book value per share was $4.05 for the recent quarter.
The stock price has decreased by nearly 11.83% over the past year, determining a market capitalization of $133.70 million and a 52-week range of $1.75 to $3.98.
GuruFocus assigned a score of 5 out of 10 for the financial strength rating and 2 out of 10 for the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of buy with an average target price of $4.76 per share.
Disclosure: I have no position in any security mentioned.
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This article first appeared on GuruFocus.
