If there's any benefit to the market's current volatility, it's that the value tree continues to be shaken after years of being barren, with more and more good deals beginning to fall out.
My "Ben Graham's Stocks for the Defensive Investor" screen, which is based on the theories of late legendary value investor Ben Graham, revealed a few new value plays recently:
Investors have hammered engine-maker Cummins over the past year, and the stock is down more than 40% since May. That means it's cheap enough to make the cut on my Ben Graham value screen.
CMI currently trades at just 10x 2016 consensus estimates, but yields 4.5% and its dividend has grown at better than 21% over the past five years. Of course, technicians might question the wisdom of buying the stock at current prices, as my RealMoney colleague Bruce Kamich did yesterday.
Innophos Holdings (IPHS) and Waddell & Reed (WDR)
Specialty-chemical company Innophos Holdings, which has been the subject of recent activist investor activity by FrontFour Capital, also makes the grade on my Ben Graham screen.
So does investment-management firm Waddell & Reed, which has seen its share price halved since June amid poor fund performance and fallout from high-yield bonds' sell-off.
Both of these stocks are also currently paying huge dividends, with yields of 8% and 7.43%, respectively.
Oil-equipment maker Tesco continues to suffer from crude's price decimation.
If the name sounds familiar, that's because I included it in my Double-Net Dividend Portfolio at the end of December. But things have only gotten worse for the stock since then, and TESO now trades at 0.96x net current asset value.
That's ugly, but let's put that valuation into perspective. Net current asset value refers to current assets less total liabilities, but doesn't consider long-term assets. In Tesco's case, long-term assets excluding goodwill and other intangible assets total $184 million in property, plant and equipment (PP&E) net of depreciation. That works out to $4.71 per share on a stock that's currently trading for around $5.50.
True, the bulk of Tesco's PP&E is drilling equipment. That's not an asset that's currently in favor, but one that should ultimately have at least some value.
Now, 2016 will no doubt be a rocky road for Tesco, which is expected to be in the red for the year. But the company has no debt and ended last quarter with about $57 million in cash.