Are you familiar with the dynamic duo of Fama and French?
No, they didn't star in
Baby Mama-- that was Fey and Poehler. And they
didn't perform "Who's on First?" -- that was Abbott and
Costello.
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 less than two times 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
communityof more than 140,000 investors.
Company
Book Value Multiple
1-Year Return
CAPS Rating
(out of 5)
Valero Energy (NYSE: VLO)
0.7
1%
****
Vodafone
1.0
14%
****
NYSE Euronext (NYSE: NYX)
1.1
(1%)
*****
Terex (NYSE: TEX)
1.4
14%
*****
POSCO (NYSE: PKX) Continued... |