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If you’re the type of investor who is always looking for value that can be measured, you could do worse than to look to the Pacific rim of Asia these days for a few intriguing possibilities. As a matter of fact, right now that region hosts 5 companies with stocks that may fit the criteria for Benjamin Graham-style value potential. Here the ones that came up in my latest screen:
AU Optronics is a Taiwan based maker of semiconductors that trades on the New York Stock Exchange. With a price/earnings ratio of only 5, the company is available at about a 40% discount from its book value.
AU Optronics chart.
AU’s earnings per share track record is in the red for the past 5-years, but this year is green. The levels of debt are low and they’re paying a 4% dividend. The short float is just under 5%.
Honda Motor Company is Japan-based and New York Stock Exchange listed. It’s been around since 1946. The legendary manufacturer of cars and scooters can be purchased these days at a 26% discount from its book value. The price/earnings ratio sits at 5.6.
Honda chart.
The company’s 5-year record of earnings is all positive and this year’s earnings per share is solidly green. Long-term debt is half of shareholder equity. Honda is paying a dividend of 3%.
SK Telecom is a mobile telecommunications company based in South Korea. It’s NYSE-listed and now trading for 83% of book. The price/earnings ratio is 6.
SK Telecom chart.
Their 5-year earnings record is positive and this year is coming in as very good. SK pays a 4% dividend. The short float is a negligible .06%. I wrote about this stock here a few months ago — and it’s still cheap.
LG Display is another Korean outfit listed on the New York Stock Exchange. Right now this diversified electronics company is trading at just a bit less than half its book value.
LG Display chart.
The price/earnings ratio is low at 5.8. LG’s 5-year record of earnings is good and this year is very good. The quarter-to-quarter is red, a concern. Debt levels are low. The dividend yield is 2.82%.
Posco aka Pohang Iron & Steel is a basic materials company based in Korea that trades at 62% of book. The price/earnings ratio is 9.45. The 5-year track record of earnings is positive and this year is very green.
Posco chart.
The debt levels are low. They’re paying a 4.24% dividend. The average daily volume of Posco is much lower than the other companies mentioned — billion dollar hedge funds may have liquidity concerns with this type of an issue.
Needless to say, there’s something about this region and something about these companies that seems to be keeping big investment money away. But with the kind of value that might be present, how long can that last?