Undervalued Stocks With Wide Margin of Safety

D.R. Horton and Citigroup are inexpensive investment opportunities

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Apr 14, 2016
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The following stocks are trading with a wide margin of safety according to the DCF calculator, and some of them have a very low P/E ratio. GuruFocus' All-in-One Screener can be used to find similar stocks.Ă‚

D.R. Horton Inc. (DHI) has a market cap of $11.67 billion and a GuruFocus’ business predictability rating of 1 star. The stock has a price of $31.6 with a forward P/E ratio of 12.30, and according to the DCF calculator is trading with a margin of safety of 43%. During the last 12 months, the price of the stock has risen by 10% and is now 4.53% below its 52-week high.

D.R. Horton constructs and sells homes through its operating divisions in 27 states and 79 metropolitan markets of the U.S. under the names of D.R. Horton, America's Builder, Express Homes, Emerald Homes, Breland Homes, Regent Homes and Crown Communities. Its profitability and growth is rated 8/10 with ROE of 13.55% and ROA of 7.06% that are ranked higher than 76% of other companies in the same industry.

The largest shareholder among the gurus is Ken Heebner (Trades, Portfolio) with 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% and Ray Dalio (Trades, Portfolio) with 0.05%.

Skyworks Solutions Inc. (SWKS) has a market cap of $14.77 billion and a GuruFocus’ business predictability rating of 1 star. The stock has a price of $77.07 with a forward P/E ratio of 11.45, and according to the DCF calculator is trading with a margin of safety of 52.55%. During the last 12 months, the price of the stock has dropped by 19% and is now 32.49% below its 52-week high.

Skyworks Solutions is an innovator of high reliability analog and mixed signal semiconductors. Its profitability and growth is rated 8/10 with ROE of 31.41% and ROA of 27.12% that are ranked higher than 96% of other companies in the same industry

Jim Simons (Trades, Portfolio) is the largest shareholder of the company among the gurus with 0.26% of outstanding shares, followed by Ray Dalio (Trades, Portfolio) with 0.09%, Pioneer Investments (Trades, Portfolio) with 0.08%, Jeremy Grantham (Trades, Portfolio) with 0.05%, Scott Black (Trades, Portfolio) with 0.021.73% and Joel Greenblatt (Trades, Portfolio) with 0.02%.

Citigroup Inc.Ă‚ (C) has a market cap of $130.45 billion and a GuruFocus business predictability rating of 1 star. The stock has a price of $44.25 with a forward P/E ratio of 7.42 and according to the DCF calculator is trading with a margin of safety of 24%, since its fair value is $57.9. During the last 12 months the price of the stock has dropped by 16% and is now 55% below its 52-week high.

Citigroup is a financial services holding company, whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking, credit cards, corporate and investment banking, securities brokerage and wealth management. It’s profitability and growth is rated 6/10 with ROE of 7.50% and ROA of 0.96%.

The largest shareholder among the gurus is Barrow, Hanley, Mewhinney & Strauss with 0.73% of outstanding shares, followed by HOTCHKIS & WILEY with 0.53%, Ken Fisher (Trades, Portfolio) with 0.41%, Steven Romick (Trades, Portfolio) with 0.38%, First Pacific Advisors (Trades, Portfolio) with 0.38% and Bill Nygren (Trades, Portfolio) with 0.31%.

Huntington Ingalls Industries Inc. (HII) has a market cap of $6.7 billion. The stock has a price of $143.14 with a forward P/E ratio of 14.27, and according to the DCF calculator is trading with a margin of safety of 61%. During the last 12 months, the price of the stock has risen by 3% and is now 0.25% below its 52-week high.

The company's main areas of business include the design, construction, repair and maintenance of nuclear-powered ships, such as aircraft carriers and submarines, and non-nuclear ships, such as surface combatants, expeditionary warfare, and coastal defense surface ships, as well as the refueling and overhaul and the inactivation of nuclear-powered ships. Its profitability and growth is rated 7/10 with ROE of 28.02% and ROA of 6.53% that are ranked higher than 77% of other companies in the same industry.

Jim Simons (Trades, Portfolio) is the largest shareholder of the company among the gurus with 3.18% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 0.49%, Steven Cohen (Trades, Portfolio) with 0.21%, Jim Chanos (Trades, Portfolio) with 0.11%, Pioneer Investments (Trades, Portfolio) with 0.07% and Paul Tudor Jones (Trades, Portfolio) with 0.03%.

Biogen Inc.Ă‚ (BIIB) has a market cap of $59.42 billion and a GuruFocus business predictability of 5 stars. The stock has a price of $271.73 with a forward P/E ratio of 13.23, and according to the DCF calculator is trading with a margin of safety of 38%. During the last 12 months, the price of the stock has dropped by 36% and is now 37.23% below its 52-week high.

Biogen is a biotechnology company. It discovers, develops, manufactures and markets therapies for the treatment of autoimmune disorders, neurodegenerative diseases and hemophilia. Its profitability and growth is rated 9/10 with ROE of 32.25% and ROA of 20.50% that are ranked higher than 96% of other companies in the same industry.

The largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 7.23% of outstanding shares, followed by Vanguard Health Care Fund (Trades, Portfolio) with 1.74%, Frank Sands (Trades, Portfolio) with 1.54%, Andreas Halvorsen (Trades, Portfolio) with 0.177% First Eagle Investment (Trades, Portfolio) with 0.09% and Ken Fisher (Trades, Portfolio) with 0.05%.

Foot Locker Inc.Ă‚ (FL) has a market cap of $8.43 billion. The stock has a price of $61.97 with a forward P/E ratio of 13.00, and according to the DCF calculator is trading with a margin of safety of 51%. During the last 12 months, the price of the stock has risen by 2% and is now 19.40% below its 52-week high.

Foot Locker is a retailer of athletically inspired shoes and apparel, operating 3,423 mainly mall-based stores in the U.S., Canada, Europe, Australia and New Zealand. It operates in two reportable segments namely Athletic Stores and Direct-to-Customers. Its profitability and growth is rated 8/10 with ROE of 21.25% and ROA of 14.72% that are ranked higher than 83% of other companies in the same industry.

Joel Greenblatt (Trades, Portfolio) is the largest shareholder of the company among the gurus with 0.34% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.19%, First Pacific Advisors (Trades, Portfolio) with 0.17%, Steven Cohen (Trades, Portfolio) with 0.16%, Ray Dalio (Trades, Portfolio) with 0.14% and FPA Capital Fund (Trades, Portfolio) with 0.06%.

Mondelez International Inc.Ă‚ (MDLZ) has a market cap of $66.99 billion and a GuruFocus business predictability of 1 star. The stock has a price of $42.7 with a forward P/E ratio of 20.70, and according to the DCF calculator is trading with a margin of safety of 10%. During the last 12 months, the price of the stock has risen by 14% and is now 12.54% below its 52-week high.

Mondelez International manufactures and markets confectionery products. The company manufactures and markets food and beverage products for consumers in approximately 165 countries around the world. Its profitability and growth is rated 5/10 with ROE of 26.95% and ROA of 11.17% that are ranked higher than 85% of other companies in the same industry.

The largest shareholder among the gurus is Bill Ackman (Trades, Portfolio) with 1.46% of outstanding shares, followed by First Eagle Investment (Trades, Portfolio) with 0.31%, Mario Gabelli (Trades, Portfolio) with 0.18%, Pioneer Investments (Trades, Portfolio) with 0.17%, John Burbank (Trades, Portfolio) with 0.08% and George Soros (Trades, Portfolio) with 0.07%.