These Large Cap Stocks Are Trading Under Book Value

I ran a fairly simple stock screen that tests for companies whose shares are trading at a discount to book value.  The criteria are:

  • The sector the company operates in is not Financial: bank stocks tend to trade below book value as a matter of course, and so low P/BV ratios in this sector are not indicative of value.
  • Book value > market capitalization: Market capitalization is the market value of the company’s common equity.
  • Market capitalization > $10 billion.  Believe it or not, there are a lot of companies presently trading whose market value is less than its book value.  In fact, if we limit the market capitalization to a lower level of $1 billion, 73 companies are returned.  If we specify a lower limit of $500 million, more than 100 (global) stocks are returned.  So, setting a lower bound of $10 billion market capitalization gives us a manageable number of US stocks.  Admittedly, these boundaries are somewhat arbitrary, but we have to start somewhere!

Following is some information on these companies:

  • Vodafone Group Plc (NASDAQ:VOD): This company operates in the Services sector. Its book value is $139,909,172,380 and its market capitalization is $133,702,242,046, which implies that its shares are trading at a 4.44% discount to its book value per share. About the company:  Vodafone Group Plc provides a range of mobile telecommunications services, including voice and data communications. Vodafone has equity interests in 28 countries and Partner Networks in a further 7 countries with almost all the Group’s mobile subsidiaries operating principally under the brand name Vodafone. In the United States their associated undertaking operates as Verizon Wireless. Competitors to Watch: AT&T, Inc. (NYSE:T), Qwest Communications International Inc. (NYSE:Q), MetroPCS (NYSE:PCS), Terremark (NASDAQ:TMRK), Qwest (NYSE:Q), CenturyLink (NYSE:CTL), NTELOS Holdings (NASDAQ:NTLS), Verizon (NYSE:VZ), Leap Wireless (NASDAQ:LEAP), Apple (NASDAQ:AAPL), Nokia (NYSE:NOK), Research in Motion (NASDAQ:RIMM) and Sprint Nextel Corp. (NYSE:S).
  • Boston Scientific Corporation (NYSE:BSX): This company operates in the Healthcare sector. Its book value is $11,296,000,000 and its market capitalization is $10,529,340,000, which implies that its shares are trading at a 6.79% discount to its book value per share. About the company:  Boston Scientific Corporation develops, manufactures, and markets minimally invasive medical devices. The Company’s products are used in interventional cardiology, cardiac rhythm management, peripheral interventions, electrophysiology, neurovascular intervention, endoscopy, urology, gynecology and neuromodulation.
  • CRH PLC (ADR) (NYSE:CRH): This company operates in the Capital Goods sector. Its book value is $14,628,137,279 and its market capitalization is $14,288,738,500, which implies that its shares are trading at a 2.32% discount to its book value per share. About the company:  CRH plc manufactures cement, concrete products, aggregates, asphalt, clay bricks, chemical lime, security fencing products, and roofing, insulation and other building materials. The Group also operates some 136 builders merchant locations and 54 DIY stores. CRH, via its subsidiaries, operates in some 19 countries, including Ireland, the US, Spain, Germany and the Netherlands.
  • ORIX Corporation (NYSE:IX): This company operates in the Services sector. Its book value is $16,398,663,854 and its market capitalization is $10,414,230,505, which implies that its shares are trading at a 36.49% discount to its book value per share. About the company:  ORIX Corporation provides comprehensive financial services throughout the world. The Company’s business lines include leasing, installment loans, real estate loans, life insurance, banking, securities brokerage, venture capital, and consumer finance. ORIX also operates a professional baseball team, the ORIX Buffalos.
  • Korea Electric Power Corporation (NYSE:KEP): This company operates in the Utilities sector. Its book value is $37,978,111,421 and its market capitalization is $16,847,095,563, which implies that its shares are trading at a 55.64% discount to its book value per share. About the company:  Korea Electric Power Corporation (KEPCO) generates, transmits, and distributes electricity to South Korea for a variety of uses. The Company also builds and operates hydro-power, thermal-power, and nuclear power units in South Korea.
  • LG Display Co Ltd. (NYSE:LPL): This company operates in the Technology sector. Its book value is $10,215,867,092 and its market capitalization is $10,002,940,211, which implies that its shares are trading at a 2.08% discount to its book value per share. About the company:  LG Display Company Ltd. develops and manufactures digital display products. The Company’s products include thin film transistor-liquid crystal displays (TFT-LCD) for notebook and desktop computer monitors, TVs, and mobile phones. LG Display provides its products to overseas and domestic markets.
  • ArcelorMittal (NYSE:MT): This company operates in the Basic Materials sector. Its book value is $62,430,000,000 and its market capitalization is $50,160,410,000, which implies that its shares are trading at a 19.65% discount to its book value per share. About the company:  ArcelorMittal produces steel. The Company manufactures cold rolled, electrogalvanized and coated steels, slabs, special quality bars, and wire rods. Arcelor Mittal has steel making operations in Europe, the Americas, Asia, and Africa.
  • Nippon Telegraph + Telephone Corp. (ADR) (NYSE:NTT): This company operates in the Services sector. Its book value is $99,544,699,723 and its market capitalization is $67,770,313,021, which implies that its shares are trading at a 31.92% discount to its book value per share. About the company:  NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NYSE:NTT) provides a variety of telecommunication services, including telephone, telegraph, leased circuits, data communication, terminal equipment sales, and related services. The Company provides both local and long distance telephone services within Japan.
  • Panasonic Corporation (NYSE:PC): This company operates in the Consumer Cyclical sector. Its book value is $31,806,831,688 and its market capitalization is $28,983,302,370, which implies that its shares are trading at a 8.88% discount to its book value per share. About the company:  Panasonic Corporation manufactures electric and electronic products. The Company produces home appliances, audio & video, computer peripherals, telecommunications, industrial equipment, and electronic parts. Panasonic has associated companies around the world.
  • Transocean LTD (NYSE:RIG): This company operates in the Energy sector. Its book value is $21,383,000,000 and its market capitalization is $19,539,400,000, which implies that its shares are trading at a 8.62% discount to its book value per share. About the company:  Transocean Ltd. is an offshore drilling contractor. The Company owns or operates mobile offshore drilling units, inland drilling barges, and other assets utilized in the support of offshore drilling activities worldwide. Transocean specializes in technically demanding segments of the offshore drilling business, including deepwater and harsh environment drilling services.
  • Sony Corporation (NYSE:SNE): This company operates in the Consumer Cyclical sector. Its book value is $31,670,046,810 and its market capitalization is $25,897,037,347, which implies that its shares are trading at a 18.23% discount to its book value per share. About the company:  SONY CORPORATION manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets. The Company’s other businesses include music, pictures, computer entertainment, and online businesses.
  • Telecom Italia S.p.A. (NYSE:TI): This company operates in the Services sector. Its book value is $40,774,586,182 and its market capitalization is $23,546,760,024, which implies that its shares are trading at a 42.25% discount to its book value per share. About the company:  Telecom Italia S.p.A., through subsidiaries, offers fixed line and mobile telephone and data transmission services in Italy and abroad. The Company offers local and long-distance telephone, satellite communications, Internet access, and teleconferencing services.
  • Valero Energy Corporation (NYSE:VLO): This company operates in the Energy sector. Its book value is $15,025,000,000 and its market capitalization is $13,218,400,000, which implies that its shares are trading at a 12.02% discount to its book value per share. About the company:  Valero Energy Corporation is an independent petroleum refining and marketing company that owns and operates refineries in the United States, Canada, and Aruba. The Company produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products as well as diesel fuel, low-sulfur and ultra-low-sulfur diesel fuel, and oxygenates. Competitors to Watch: Tesoro Corporation (NYSE:TSO), Alon USA Energy, Inc. (NYSE:ALJ), Western Refining, Inc. (NYSE:WNR), CVR Energy, Inc. (NYSE:CVI), Sunoco, Inc. (NYSE:SUN), Holly Corporation (NYSE:HOC), Chevron Corporation (NYSE:CVX), Frontier Oil Corporation (NYSE:FTO), Delek US Holdings, Inc. (NYSE:DK), BP plc (NYSE:BP), ConocoPhillips (NYSE:COP), United States Oil (NYSE:USO), Marathon (NYSE:MRO), Hess (NYSE:HES), TOTAL (NYSE:TOT), Suncor (NYSE:SU), Petroleo Brasileiro (NYSE:PBR) and Exxon Mobil Corporation (NYSE:XOM).

(Note: Selected financial data are sourced from screener.co.  All data are assumed to be accurate.)

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