Gilead, Expedia Are Greatly Undervalued

The companies are also trading below the Peter Lynch earnings line

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Mar 17, 2016
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The following are some of the stocks that are trading below the Peter Lynch earnings line, according to GuruFocus' All-In-One Screener.

D.R. Horton Inc. (DHI) is trading at about $30 per share, but the Peter Lynch earnings line gives the company a fair price of $51.50, for a margin of safety of 42%. It is trading with a P/E ratio of 14.50, which is ranked lower than 53% of its competitors in the Global Residential Construction industry, and is currently 9.76% below its 52-week high and 30.04% above its 52-week low.

D.R. Horton reports a cash-to-debt ratio of 0.34, which is far below the industry median of 2.11, with strong ROE of 13.55% and ROA of 7.06%, which outperforms 78% of its competitors.

The company constructs and sells homes through its operating divisions in 27 states and 79 metropolitan markets of the U.S., under the names: D.R. Horton, America's Builder, Express Homes, Emerald Homes, Breland Homes, Regent Homes and Crown Communities.

The stock is part of eight guru portfolios: Ken Heebner (Trades, Portfolio) is the main shareholder among the gurus with a stake of 2.44% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 0.61%, Jim Simons (Trades, Portfolio) with 0.24%, Ken Fisher (Trades, Portfolio) with 0.19%, Ray Dalio (Trades, Portfolio) with 0.05% and Steven Cohen (Trades, Portfolio) with 0.05%.

Expedia Inc. (EXPE) is trading at about $114 per share, but the Peter Lynch earnings line gives the company a fair price of $135.24, for a 14% margin of safety. It is trading with a P/E ratio of 19.88, which is higher than 53% of its competitors in the Global Leisure industry, and is currently 18.65% below its 52-week high and 29.30% above its 52-week low.

The company reports a cash to debt of 0.53, which is below the industry median of 0.81, with strong ROE of 29.71% and ROA of 6.49%, which are outperforming 74% of its competitors.

Expedia offers holiday packages, rental cars, cruises, and destination services and activities.

The company is held by seven gurus:Â Steven Cohen (Trades, Portfolio) is the largest shareholder among the gurus with 0.39% of outstanding shares, followed by Columbia Wanger (Trades, Portfolio) with 0.11%, Jim Simons (Trades, Portfolio) with 0.08%, Pioneer Investments (Trades, Portfolio) with 0.07%, George Soros (Trades, Portfolio) with 0.02, Louis Moore Bacon (Trades, Portfolio) with 0.01% and Manning & Napier Advisors with 0.01%.

Wells Fargo & Co. (WFC) is trading at about $50 per share, but the Peter Lynch earnings line gives the company a fair price of $50.55, for a small 2% margin of safety. The stock is trading with a P/E ratio of 11.94, which is ranked higher than 52% of its competitors in the industry and is currently 15.69% below its 52-week high and 11.33% above its 52-week low.

The company reports a cash-to-debt ratio of 0.06, far below the industry median of 2.79, with easy ROE of 1.38% and 1.33%, which are outperforming the 67% of its competitors.

Wells Fargo provides retail, commercial and corporate banking services through banking stores and offices, the Internet and other distribution channels to individuals, businesses and institutions in all 50 states.

The stock is part of nine guru portfolios: Warren Buffett (Trades, Portfolio) is the main shareholder among the gurus with a stake of 9.45% of outstanding shares, followed by Dodge & Cox with 1.38%, Chris Davis (Trades, Portfolio) with 0.51%, Ken Fisher (Trades, Portfolio) with 0.37%, PRIMECAP Management (Trades, Portfolio) with 0.3%, Tom Russo (Trades, Portfolio) with 0.29% and Lou Simpson (Trades, Portfolio) with 0.13%.

Goodyear Tire & Rubber Co. (GT) is trading at about $33 per share, but the Peter Lynch earnings line gives the company a fair price of $117.33, for a 72% margin of safety. The company is trading with a P/E ratio of 30.34, which is higher than 70% of its competitors in the Global Rubber & Plastics industry, and is currently 6.32% below its 52-week high and 32.81% above its 52-week low.

The company reports a cash-to-debt ratio of 0.26, which is below the industry median of 0.65, with weak ROE 7.90% and ROA 1.77%, which are underperforming the 69% of its competitors. It is engaged in manufacturing of tires. It develops, manufactures, markets and distributes tires for various applications. It also manufactures and markets rubber-related chemicals for various applications.

The company is held by eight gurus:Â Diamond Hill Capital (Trades, Portfolio) is the largest shareholder among the gurus with a stake of 1.82% of outstanding shares, followed by HOTCHKIS & WILEY with 1.05%, David Tepper (Trades, Portfolio) with 0.8%, Pioneer Investments (Trades, Portfolio) with 0.49%, Joel Greenblatt (Trades, Portfolio) with 0.35% and Jim Simons (Trades, Portfolio) with 0.08%.

AerCap Holdings NVÂ (AER) is trading at $38 per share, but the Peter Lynch earnings line gives the company a fair price of $137.96, for a 73% margin of safety. It is trading with a P/E ratio of 6.53, which is higher than 83% of its competitors in the Global Airports & Air Services industry, and is currently 26.83% below its 52-week high and 53.11% above its 52-week low.

The company reports a cash-to-debt ratio of 0.04, which is above the industry median of 0.37, with strong ROE 15.38%, which is outperforming 78% of its competitors.

AerCap Holdings NV is an integrated aviation company, conducting aircraft leasing and trading aircraft. It also provides aircraft management services to other owners of aircraft.

The stock is part of seven guru portfolios: Donald Smith (Trades, Portfolio) is the main shareholder among the gurus with a stake of 4.8% of outstanding shares, followed by David Einhorn (Trades, Portfolio) with 3.73%, Leon Cooperman (Trades, Portfolio) with 2.83%, Richard Perry (Trades, Portfolio) with 1.43%, Eric Mindich (Trades, Portfolio) with 1.12% and Louis Moore Bacon (Trades, Portfolio) with 0.46%.

Tesoro Corp. (TSO) is trading at about $88 per share, but the Peter Lynch earnings line gives the company a fair price of $308.75, for a 72% margin of safety. The company has a P/E ratio of 7.14, which is higher than 86% of its competitors in the Global Oil & Gas Refining & Marketing industry, and is currently 26.54% below its 52-week high and 29.66% above its 52-week low.

The company reports a cash-to-debt ratio of 0.23, which is below the industry median of 0.46, with strong ROE of 31.54% and ROA of 9.34%, which are outperforming 82% of its competitors.

Tesoro Corp. is an independent petroleum refining and marketing company in the western U.S.Â

The company is held by six gurus:Â Jim Simons (Trades, Portfolio) is the largest shareholder among the gurus with a stake of 0.64% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.16%, Joel Greenblatt (Trades, Portfolio) with 0.12%, Steven Cohen (Trades, Portfolio) with 0.1%, Ray Dalio (Trades, Portfolio) with 0.08% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.