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John Rankin is an equity analyst for a value fund. Using a computer screen, he has narrowed his choice of investments down to four undervalued
John Rankin is an equity analyst for a value fund. Using a computer screen, he has narrowed his choice of investments down to four undervalued companies in the household appliances sub-industry and has prepared the following information: Forecasted ROE (%) Beta Current P/BV 5-Year Company | 2015 2016 2017 2018 2019 Average AFC 1.0 1.1 1.4 1.5 1.6 1.3 AFG 1.5 1.5 1.2 SAFC 1.2 1.2 1.3 1.2 1.3 1.2 ORI 1.4 1.5 1.4 1.4 1.5 1.4 Sub-industry Average 1.6 1.1 1.4 1.3 1.0 1.3 1.4 1.8 13.5 9.0 9.5 10.0 11.0 .95 1.15 1.05 0.95 1.00 | U REQUIRED: 1. Which share should he recommend? Explain your reason for the recommendation
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