The Bill & Melinda Gates Foundation is the largest private foundation in the world, founded by Bill and Melinda Gates.The foundation maintains an online database of grants on its website which includes for each grant the name of the grantee organization, the purpose of the grant and the amount. This database is publicly available.
The foundation’s portfolio is composed of 18 stocks and has a total value of $18,635 million.
These are the stocks from its portfolio that have the most growing earnings and that are trading with a very low P/E if compared to other companies on its portfolio.
Cloud Peak Energy Inc (CLD)
CLD operates some of the safest mines in the industry and solely in the PRB, the lowest cost coal producing region of the major coal producing regions in the U.S., and operates two of the five largest coal mines in the region and in the U.S. It has a market cap of $286.84 million.
CLD is trading at about $4.50 with a trailing 12-month P/E multiple of 3.08 and the price during the last five years dropped by 67%; during the last 12 months the price has been as high as $19.74 and as low as $4.35, and it had an average trading price of $8.61.
The DCF model gives a fair value of $21.54 that put the stock as undervalued and with a margin of safety of 78% at current prices.
During the last 12 months revenue dropped by 4% while EBITDA grew by 52.90% and EPS by 329%.
Reading International Inc (RDI)
RDI is a diversified company engaged in the development, ownership and operation of entertainment and real property assets in the United States, Australia and New Zealand. It has a market cap of $310.47 million.
RDI is trading with a trailing 12-month P/E multiple of 10.90 and an estimated forward P/E multiple of 9.38. The stock has a 10-year annual rose of 86%. It is now trading at a price of $13 and during the last 52 weeks has been as high as $14.45 and as low as $7.82 in the last 52 weeks with an average trading price of 12$.
The DCF model gives a fair value of $18.14 that put the stock as undervalued and with a margin of safety of 28% at current prices.
Compared to the last 12 months revenue is almost flat, while EBITDA grew by 13.90% and EPS by 207.50%.
Houston Wire & Cable Co (HWCC)
HWCC provides its customers with a single-source solution for wire and cable, hardware and related services. It offer products in most categories of wire and cable. It has a market cap of $167.04M.
HWCC is trading at about $9.50 with a trailing 12-month P/E multiple of 12.14 and an estimated forward P/E ratio of 10.22. The stock during the last 12 months dropped by 20% (37% over the last 10 years) and has been as high as $14.00 and as low as $8.80 with an average price of $10.66.
The DCF model, gives a fair value of $6.07 that put the stock as overpriced by 59%.
During last 12 months revenue didn’t face big changes, while EBITDA grew by 30% and EPS by 75%.
Emerson Electric Co (EMR)
EMR is engaged in designing and supplying product technology and delivering engineering services in industrial, commercial and consumer markets. It has a market cap of $39.93 billion.
EMR is trading with a trailing 12-month P/E multiple of 15.30 and an estimated forward P/E of 15.63. The price during the last 12 months dropped by 14% (+83% during the last 10 years) and has been as high as $68.67 and as low as $54.95 in the last 52 weeks; it had an average value of $59.
The DCF model gives a fair value of $43.17 that put the stock as overpriced by 34%.
During last 12 months revenue is flat (+0.60%) while EBITDA grew by 29.50% and EPS by 35.60%.
Synalloy Corp (SYNL)
SYNL’s business is divided into two segments, the Metals Segment and the Specialty Chemicals Segment. The Metals Segment, operating as Bristol Metals, LLC, manufactures pipe and piping systems for the chemical, petrochemical, pulp and paper, mining, power generation, wastewater treatment, liquid natural gas and other industries. . It has a market cap of $120.34M.
SYNL is trading at a price of $14 with a trailing 12 month P/E of 16.49. The stock during the last 12 months dropped by 14% (+36% over the last 10 years) and has been as high as $18.84 and as low as $13.64 during the last 52 weeks, with an average price of $15.
The DCF model, gives a fair value of $12.86 that put the stock as overpriced by 8% while the Peter Lynch earnings line gives a higher fair value of $22.8 that says the stock is undervalued by 36%
During last 12 months revenue dropped by 12.10% while EBITDA grew by 86% and EPS by 150%.
Canadian National Railway Co (CNI)
CNI’s business is divided into two segments, the Metals Segment and the Specialty is engaged in the rail and related transportation business. It transports goods for business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network spanning Canada and mid-America. It has a market cap of $49.35 billion.
CNI is trading at a price of $60 with a trailing 12 month P/E of 19.00 and a forward P/E of 16.10. During the last 12 months the price declined by 3% (but rose by 322% over the last 10 years) and it has been as high as $75.92 and as low as $57.66 with an average value of $66
The DCF model, gives a fair value of $54.63 that put the stock as overpriced by 12%. The Peter Lynch earnings line gives almost the same result, with a fair value set to $59.
During last 12 months revenue grew by 19.10%, EBITDA by 21.50% and EPS by 24.10%.
Conclusions
All the above stocks had growing earnings during the last 12 months and are trading with a very low P/E. Let’s do a summary
| Ticker | 12 months EPS growth rate | P/E |
| CLD | 329% | 3.08 |
| RDI | 207.50% | 10.90 |
| HWCC | 75% | 12.14 |
| EMR | 35.60% | 15.30 |
| SYNL | 150% | 16.49 |
| CNI | 24.10% | 19.00 |
