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Buffett's 'Secret' Reveals 5 Stocks to Buy

Stocks in this article: F TER WDC JOY EXC

Exelon

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Last up is Exelon (EXC), the $30.5 billion power holding company that owns a mix of regulated and unregulated businesses. Exelon's book value per share has grown more than 21% in the last year, thanks in large part to the firm's acquisition of Constellation Energy, a deal that dramatically increased the firm's overall size. The move also makes Exelon the biggest power retailer in the country.

Exelon's heavy exposure to nuclear power is a big benefit for the firm, especially as prices for energy commodities continue to climb. Nuclear power plants are nightmares to build (both from regulatory standpoints and in terms of capital required), but they produce power more cheaply than almost any other source -- and nuclear power makes up around 80% of Exelon's output. And the high barriers to building new plants means that replacement costs exceed the conservative values carried on EXC's books.

The power business is capital intense, and Exelon's balance sheet is no exception. That said, the firm generates enough cash right now to cover its debt obligations and to continue to pay out a huge 5.9% dividend yield. While growth in the payout may be a little less likely, Exelon's book value growth is another source of tangible shareholder value that shouldn't be ignored.

To see these book value growth names in action, check out the Book Value Per Share Growth Fall 2012 portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

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