think the stock is cheap at under $6, down from almost $17 a year ago. The discount here is put at 50%.
Valassis Communications (NYSE: VCI), a marketing services company, is a pioneer of the Sunday newspaper coupon booklet. A proposed acquisition of ADVO drew the market’s disfavor and the stock dropped from $24 to $18 since early July. If Valassis can get out of the deal (the dispute is in court), the stock price could go back up. It’s trading at an approximate 40% discount to Rogers’ private market value estimate.
Mohawk Industries Inc. (NYSE: MHK) manufactures carpets, rugs, and floor tiles. “The market thinks slower home sales will hurt this company,” says Rogers, “but you don’t need to buy a new home to buy new carpeting.” Falling oil prices will help profits because raw materials include petroleum. Current discount to private market value: 40%.
Realogy Corp. (NYSE: H) was spun off by parent company Cendant in July and now holds real estate franchises like Century 21, Coldwell Banker, and ERA. Spin-offs often sell down initially because investors unload the new shares they’re issued. The stock now looks oversold, at a 25% discount to estimated value.
Steelcase Inc. (NYSE: SCS) makes office furniture, which is likely to continue to be in demand even if housing sales continue to fall. The stock sells at an estimated 30% discount, signaling the chance for real profits.