5 Undervalued Stocks With Profitable Businesses

Sally Beauty makes the list

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Oct 07, 2020
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According to the GuruFocus All-in-One Screener, a Premium feature, the following companies have high business predictability ratings and wide margins of safety as of Oct. 7.

Encore Capital

Encore Capital Group Inc. (ECPG, Financial) has a business predictability rank of three out of five stars and, according to the discounted cash flow calculator, a 58.85% margin of safety at an average price of $39.04 per share.

The specialty finance company has a market cap of $1.22 billion and an enterprise value of $4.29 billion. Over the past five years, its revenue and earnings per share have increased 10.20% and 6.40%.

Over the past 12 months, the stock has gained 24% and is currently trading with a price-earnings ratio of 6.11. The share price has been as high as $49.01 and as low as $15.27 in the last year. As of Oct. 7, the stock was trading 20.34% below its 52-week high and 155.66% above its 52-week low.

With 0.61% of outstanding shares, Jeremy Grantham (Trades, Portfolio) is the company's largest guru shareholder, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.27% and Barrow, Hanley, Mewhinney & Strauss with 0.08%.

Sally Beauty

Sally Beauty Holdings Inc. (SBH, Financial) has a four-star business predictability rank and, according to the DCF calculator, a 42.32% margin of safety at the average price of $9.05 per share.

The beauty products retailer has a market cap of $1.02 billion and an enterprise value of $2.95 billion. Over the past five years, its revenue and earnings per share have grown 9.10% and 0.70%, respectively.

The stock has lost 39% over the last 12 months and shares are trading with a price-earnings ratio of 9.63. The share price has been as high as $21.98 and as low as $6.28 in the last 52 weeks. As of Oct. 7, the stock was trading 58.01% below its 52-week high and 46.97% above its 52-week low.

With 0.55% of outstanding shares, Mario Gabelli (Trades, Portfolio)'s GAMCO Investors is the company's largest guru shareholder, followed by Grantham with 0.38% and Simons' firm with 0.30%.

Primoris Services

Primoris Services Corp. (PRIM, Financial) has a 3.5-star business predictability rank and, according to the DCF calculator, a 7.61% margin of safety at an average price of $18.09 per share.

The U.S contractor and infrastructure company has an $872.87 million market cap and an enterprise value of $1.31 billion. Over the past five years, its revenue has increased 14.20% and its earnings per share have risen 10.30%.

The share price has fallen 8.82% over the past 12 months. The stock is trading with a price-earnings ratio of 9.89. The share price has been as high as $23.73 and as low as $9.42 in the last 52 weeks. As of Oct. 7, the stock was trading 23.77% below its 52-week high and 92.04% above its 52-week low.

With 4.12% of outstanding shares, Barrow, Hanley, Mewhinney & Strauss is the company's most notable guru shareholder, followed by Chuck Royce (Trades, Portfolio) with 1.30% and Hotchkis & Wiley with 0.48%.

America's Car-Mart

America's Car-Mart Inc. (CRMT, Financial) has a three-star business predictability rank and, according to the DCF calculator, a 28.63% margin of safety at an average price of $88.3 per share.

The automotive retailer has a market cap of $604.16 million and an enterprise value of $835.11 million. Over the past five years, its revenue has grown 31.70% and its earnings per share have climbed 60.60%.

Shares have fallen 3.72% compared to 12 months ago. The stock is currently trading with a price-earnings ratio of 11.02. The share price has been as high as $129.70 and as low as $35.18 in the last 52 weeks. As of Oct. 7, the stock was trading 31.92% below its 52-week high and 150.99% above its 52-week low.

With 4.47% of outstanding shares, Royce is the company's largest guru shareholder.

Miller Industries

Miller Industries Inc. (MLR, Financial) has a 3.5-star business predictability rank and, according to the DCF calculator, a 48.05% margin of safety at an average price of $30.79 per share.

The company, which manufactures vehicle towing and recovery equipment, has a market cap of $351.17 million and an enterprise value of $320.72 million. Over the past five years, its revenue and earnings per share have increased 22.80% and 10.10%.

Shares have declined 1.39% compared to 12 months ago. The stock is currently trading with a price-earnings ratio of 11.28. The share price has been as high as $38.18 and as low as $25.25 in the last 52 weeks. As of Oct. 7, the stock was trading 19.36% below its 52-week high and 21.94% above its 52-week low.

With 13.18% of outstanding shares, Royce is the company's largest guru shareholder, followed by Hotchkis & Wiley with 4.82% and Grantham with 0.32%.

Disclosure: I do not own any stocks mentioned.

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