According to the Peter Lynch Growth Screen, a Premium screen nested under the All-in-One-Screener, four stocks that trade below the legendary guru’s earnings line and outperformed the Standard & Poor’s 500 Index by more than 20% in 2021 are P.A.M. Transportation Services Inc. (PTSI, Financial), Sprouts Farmers Market Inc. (SFM, Financial), HCA Healthcare Inc. (HCA, Financial) and Amerco Inc. (UHAL, Financial).
Lynch, the manager of the Fidelity Magellan Fund during the 1980s, discussed in his book, “One Up on Wall Street,” that a simple way to measure a stock’s relative valuation is to consider an earnings line at 15 times earnings per share. If the share price is less than 15 times earnings, the stock is defined as undervalued.
GuruFocus’ Peter Lynch Growth Screen identifies stocks with price-earnings ratios less than 14, a business predictability rank of at least two stars and a 10-year revenue growth rate of at least 6%.
P.A.M. Transportation
Shares of P.A.M. Transportation (PTSI, Financial) traded around $69.45, up approximately 182.92% over the past 12 months and outperforming the benchmark by 157.22%. The stock’s price-earnings ratio of 12.79 outperforms approximately 60% of global transportation competitors.
GuruFocus ranks the Arkansas-based transportation company’s profitability 7 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 9 and profit margins and returns that outperform more than 72% of global competitors.
Jim Simons (Trades, Portfolio)’ Renaissance Technologies has a holding in P.A.M. Transportation.
Sprouts Farmers Market
Shares of Sprouts Farmers Market (SFM, Financial) traded around $28.61, up approximately 47.54% over the past 12 months and outperforming the benchmark by 21.84%. The stock’s price-earnings ratio of 12.13 outperforms approximately 72% of global competitors.
GuruFocus ranks the Phoenix-based grocery store company’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 8 and profit margins and returns that are outperforming more than 77% of global competitors.
HCA Healthcare
Shares of HCA Healthcare (HCA, Financial) traded around $249.48, up approximately 47.20% over the past year and outperforming the benchmark by 21.50%. The stock’s price-earnings ratio of 12.71 outperforms approximately 75% of global competitors.
GuruFocus ranks the Nashville-based acute-care hospital company’s profitability 8 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and profit margins that outperform more than 77% of global competitors.
Amerco
Shares of Amerco (UHAL, Financial) traded around $695.56, up approximately 45.82% over the past year and outperforming the benchmark by approximately 20.12%. The stock’s price-earnings ratio of 13.48 outperforms approximately 66% of global competitors.
GuruFocus ranks the moving truck rental company’s profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank, a high Piotroski F-score of 8 and profit margins and returns that outperform more than 80% of global competitors.
