Value investors seeking bargain opportunities may be interested in the following three stocks, as their share prices are trading below the intrinsic value estimated by the GuruFocus Value Line.
The GF Value is the result of the combination of the following three factors:
- The stock's historical multiples such as price-earnings (PE) ratio, price-sales (PS) ratio, price-book (PB) ratio and price-to-free-cash-flow (PFCF) ratio.
- A GuruFocus adjustment factor based on past returns and growth of the company.
- Estimations of future business performance.
Primoris Services Corp
The first stock that meets the above criteria is Primoris Services Corp (PRIM, Financial), a Dallas, Texas-based specialty contractor and infrastructure company.
Primoris Services' share price was $19.74 at close on Friday. Primoris Services' GF Value stands at $26.24. As a result, Primoris Service's Price-to-GF-Value yields 0.75.
Therefore, based on the above relationship between the last close price and the GF Value, this stock is modestly undervalued.
The stock has a market capitalization of $960.21 million after a 6.8% decline which occurred over the past year. The 52-week range is $9.42 to $23.73, the price-earnings ratio is 10.88 (versus the industry median of 13.75), the price-book ratio is 1.49 (versus the industry median of 1.01), the price-sales ratio is 0.3 (versus the industry median of 0.6) and the price-to-free-cash-flow ratio is 4.65 (versus the industry median of 9.09).
The stock has a GuruFocus profitability rating is 8 out of 10.
Concerning future business performance, sell-side analysts on Wall Street estimate that earnings per share will increase by 3.1% this year, 10.2% in 2021 and 10% per annum over the next five years. As of October, the stock has two buy recommendation ratings and six hold recommendation ratings for an average target price of $24.25 per share.
Universal Health Services Inc
The second stock that meets the above criteria is Universal Health Services Inc (UHS, Financial), a King of Prussia, Pennsylvania-based owner and operator of medical care facilities.
Universal Health Services Inc' share price was $112.89 at close on Friday, which, compared to Universal Health Services Inc' GF Value of $141.60, gives a Price-to-GF-Value ratio of 0.80.
Therefore, based on the above relationship between the most recent close price and the GF Value, this stock is modestly undervalued.
The stock has a market capitalization of $9.54 billion as a result of a 22.3% declined which happened over the past year. The 52-week range is $65.20 to $149.02, the price-earnings ratio is 13.25 (versus the industry median of 30.77), the price-book ratio is 1.68 (compared to the industry median of 2.81), the price-sales ratio is 0.87 (versus the industry median of 2.01) and the price-to-free-cash-flow ratio is 6.26 (compared to the industry median of 17.91).
The GuruFocus profitability rating is 8 out of 10.
With regard to future business performance, sell-side analysts on Wall Street predict that after a 6.5% decline this year, the earnings per share will increase again by 12.2% in 2021 and by 10.3% per annum over the next five years. As of October, the stock has 11 buy recommendation ratings and five hold recommendation ratings for an average target price of $129.73 per share.
Koppers Holdings Inc
The third stock that meets the above criteria is Koppers Holdings Inc (KOP, Financial), a Pittsburgh, Pennsylvania-based supplier of treated wood products and treatment chemicals as well as carbon compounds in the U.S. and international markets.
Koppers Holdings Inc' share price was trading at $24.76 at close on Friday. Primoris Services' GF Value stands at $30.44. Thus, Primoris Service's Price-to-GF-Value yields 0.81.
Based on the above comparison between the last close price and the GF Value, this stock is modestly undervalued.
The stock has a market capitalization of $531.82 million after a nearly 20% declined which was observed over the past year. The 52-week range is $8.25 to $44.75, the price-earnings ratio is 7.85 (compared to the industry median of 19.92) and the price-book ratio is 3.03 (compared to the industry median of 1.53). Furthermore, the price-sales ratio is 0.31 (compared to the industry median of 1.2) and the price-to-free-cash-flow ratio is 5.89 (compared to the industry median of 15.3).
GuruFocus has assigned the stock a profitability rating of 7 out of 10.
Concerning future business performance, sell-side analysts on Wall Street estimate that earnings per share will increase by 3.3% this year, 10.8% in 2021 and 18% every year over the next five years. As of October, the stock has two buy recommendation ratings and two hold recommendation ratings for an average target price of $31.80 per share.
Disclosure: I have no position in any security mentioned.
Read more here:
- A Trio of Stocks for the Magic Formula Investing Approach
- 3 Stocks Growing Capex Fast
- 3 Fast-Growing Small Caps to Consider
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