As markets within the US continue to close at record highs day after day, it is becoming hard to find value investments. As a result, I have begun searching further afield and around the world for stocks that look to offer prospective value, or at least look undervalued in comparison to their historic averages.

Global Value

For this search I’m looking for companies with a positive price-to-earnings ratio below 15, a price-to-book ratio below one and a low level of debt, in this case defined as a debt-to-EBITDA ratio of less than one. Candidates must have also achieved a positive EPS CAGR during the past four years and a strong free cash flow, in this case defined as a free cash flow to market capitalization of greater than 10%.

Value stocks: Nippon Telegraph & Telephone

One of the largest and cheapest companies that shows up in this screen is Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) (TYO:9432). Nippon has been around for more than six decades and is a major integrated telecoms company based within Japan. The company trades at a forward P/E ratio of 10.6 and offers investors a respectable 3% dividend yield. Based on fiscal 2013 numbers, Nippon’s book value per share is Y8,964, which indicates that at a current share price of Y5,530 the company is trading at a P/B ratio of 0.6. Based on fiscal 2013 numbers, Nippon’s net debt to EBITDA stood at just under 1x and the company’s free cash flow to market cap was 10.8%. Unfortunately, the company’s growth has been glacial with an EPS CAGR of 2% for the past four years.

Value stocks: Air New Zealand

Air New Zealand Limited (NZE:AIR) (OTCMKTS:ANZFF) is another interesting play that shows up on the screen. Usually, airlines are associated with erratic earnings and high levels of debt, two factors that do not usually result in a profitable long-term investment. However, Air New Zealand does not have high levels of debt and actually reported a net cash balance during 2009 and 2010. In addition, net debt-to-equity reached a peak of 37% during 2012 but has fallen to only 20% as of fiscal 2013. Net debt to EBITDA was around 50% for fiscal 2013.

Air New Zealand Limited (NZE:AIR) (OTCMKTS:ANZFF)’s EPS have roughly doubled during the past four years and the company is trading at a price-to-book ratio of 0.9. Furthermore, and perhaps most impressive of all, Air New Zealand is slated to dish out a dividend yield of 5.9% for 2014 and the company is currently trading at a forward P/E of 8, significantly below its ten-year average forward P/E figure of 10. So, Air New Zealand definitely offers an interesting play, and is worth further research.

Value stocks: China Fiber Optic Network

Lastly we have China Fiber Optic Network System Grp Ltd (HKG:3777), a producer of fiber optics headquartered within Hong Kong. As with many Chinese companies, I would approach Fiber Optic with caution as Chinese companies are notorious for accounting manipulation. However, the Chinese stock market is one of the cheapest in the world right now, so it would silly not to try and make a buck from it.

China Fiber Optic Network System Grp Ltd (HKG:3777) has a net cash balance of HKD$484 million, as reported at the end of fiscal 2012. This cash balance is worth around HKD$0.4 per share, which implies that Fiber is trading at a historic P/E ratio of less than 4. In addition, the company is trading at book value. All in all, if Fiber Optic could be yet another cheap and attractive play. Free cash flow to market capitalization was 25% during fiscal 2012.