Are you familiar with the dynamic duo of Fama and French?
No, they didn't star in
Tommy Boy-- that was Farley and Spade. And they
didn't perform the "Time Machine" skit -- that was Slovin and
Allen.
While the names Eugene Fama and Kenneth French may not
come up in most dinner conversations, the two have done some
very interesting academic research on stocks. In short,
they've proposed that there's more to stock returns than
volatility -- which was most academics' previous consensus.
In research they conducted over various periods and across
multiple geographic locations, Fama and French determined
that stocks characterized as "value stocks" have
consistently outperformednonvalue stocks.
Today, I've rounded up five value stocks that are all
trading at two times or less their
book value.
(You can run the
same screenon the CAPS screener). To focus on
high-quality stocks, I've cross-referenced these against
ratings in our CAPS community of more than 140,000
investors.
Company
Book Value Multiple
1-Year Price Change
CAPS Rating
(out of 5)
Transocean (NYSE: RIG)
1.4
(14.8%)
*****
AT&T (NYSE: T)
1.6
(5.2%)
****
Chevron (NYSE: CVX)
1.6
(14.4%)
****
Weatherford International (NYSE:
WFT)
1.6
5.5%
*****
Verizon
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