Bargain Stocks With Low P/E

DCF calculator gives companies wide margins of safety

Author's Avatar
Jul 12, 2016
Article's Main Image

The following stocks are trading with wide margins of safety, according to the DCF calculator, and some of them have very low P/E ratios. GuruFocus' All-in-One Screener can be used to find similar stocks.

Discover Financial Services (DFS) has a market cap of $22.95 billion and a business predictability of 5/5 stars. The stock sold for $56.7 per share Tuesday afternoon with a P/E ratio of 10.66 and according to the DCF calculator is trading with a margin of safety of 62% since its fair value is $148.32. During the last 12 months the price of the stock has dropped by 5% and is now 5.98% below its 52-week high.

The company offers credit card loans, private student loans, personal loans, home equity loans and deposit products.

Its profitability and growth is rated 8/10 with ROE of 19.83% and ROA of 2.66% that are ranked higher than 53% of the other companies in the Global Credit Services industry.

The largest shareholder among the gurus is Barrow, Hanley, Mewhinney & Strauss with 1.2% of outstanding shares followed by PRIMECAP Management (Trades, Portfolio) with 0.69%, NWQ Managers (Trades, Portfolio) with 0.54%, Pioneer Investments (Trades, Portfolio) with 0.07%, John Keeley (Trades, Portfolio) with 0.02% and Diamond Hill Capital (Trades, Portfolio) with 0.01%.

Bed Bath & Beyond Inc. (BBBY) has a market cap of $6.97 billion and a business predictability of 5/5 stars. The stock sold for $45.91 per share Tuesday afternoon with a P/E ratio of 9.09 and according to the DCF calculator is trading with a margin of safety of 49% since its fair value is $89.93. During the last 12 months the price of the stock has dropped by 35% and is now 39.27% below its 52-week high.

The company operates a chain of retail stores. It operates under the names Bed Bath & Beyond, Christmas Tree Shops, Harmon and Harmon Face Values, buybuy BABY & World Market or Cost Plus World Market.

Its profitability and growth is rated 8/10 with ROE of 32.39% and ROA of 12.62% that are ranked higher than 89% of other companies in the Global Specialty Retail industry.

HOTCHKIS & WILEY is the company's largest shareholder among the gurus with 4.87% of outstanding shares followed by PRIMECAP Management (Trades, Portfolio) with 2.71%, Jeremy Grantham (Trades, Portfolio) with 1.12%, Chuck Royce (Trades, Portfolio) with 0.99% and Ray Dalio (Trades, Portfolio) with 0.3%.

Polaris Industries Inc. (PII) has a market cap of $5.57 billion and a business predictability of 2.5/5 stars. The stock sold for $88.33 per share Tuesday afternoon with a P/E ratio of 14.00 and according to the DCF calculator is trading with a margin of safety of 49% since its fair value is $171.92. During the last 12 months the price of the stock has dropped by 43% and is now 47.99% below its 52-week high.

The company designs, engineers and manufactures off-road vehicles, which includes all-terrain vehicles and side-by-side vehicles for recreational and utility use, snowmobiles and motorcycles.

Its profitability and growth is rated 7/10 with ROE 45.00% and ROA of 18.24% that are ranked higher than 96% of the other companies in the Global Recreational Vehicles industry.

The largest shareholder among the gurus is Columbia Wanger (Trades, Portfolio) with 1.93% of outstanding shares followed by Ken Fisher (Trades, Portfolio) with 0.35%, Meridian Funds (Trades, Portfolio) with 0.23% and Mairs and Power (Trades, Portfolio) with 0.01%.

Celadon Group Inc. (CGI) has a market cap of $236.2 million. The stock sold for $8.65 per share Tuesday afternoon with a P/E ratio of 6.37 and according to the DCF calculator is trading with a margin of safety of 59% since its fair value is $21.03. During the last 12 months the price of the stock has risen by 60% and is now 57.34% below its 52-week high.

The company through its subsidiaries, provides truckload transportation services between the U.S., Canada and Mexico. It offers services such as long-haul, regional, dedicated, less-than-truckload, intermodal and logistics services.

Its profitability and growth is rated 6/10 with ROE of 10.04% and ROA of 3.07% that are ranked higher than 51% of other companies in the Global Trucking industry.

Jim Simons (Trades, Portfolio) is the company's largest shareholder among the gurus with 0.36% of outstanding shares followed by Paul Tudor Jones (Trades, Portfolio) with 0.14%.

Silicom Ltd. (SILC) has a market cap of $222.27 million and a business predictability of 3.5/5 stars. The stock sold for $30.04 per share Tuesday afternoon with a P/E ratio of 14.49 and according to the DCF calculator is trading with a margin of safety of 50% since its fair value is $59.78. During the last 12 months the price of the stock has risen by 13% and is now 31.43% below its 52-week high.

The company is engaged in the design, manufacture, marketing and support of high performance networking and data infrastructure solutions for servers, server-based systems and communications devices.

Its profitability and growth is rated 8/10 with ROE of 14.27% and ROA of 11.67% that are ranked higher than 80% of other companies in the Global Communication Equipment industry.

Agrium Inc. (AGU) has a market cap of $12.44 billion and a business predictability of 3.5/5 stars. The stock sold for $91.19 per share Tuesday afternoon with a P/E ratio of 13.35 and according to the DCF calculator is trading with a margin of safety of 54% since its fair value is $196.15. During the last 12 months the price of the stock has dropped by 14% and is now 14.20% below its 52-week high.

The company is a retail supplier of agricultural products and services in North and South America and producer and marketer of agricultural nutrients and industrial products.

Its profitability and growth is rated 8/10 with ROE of 15.37% and ROA of 5.60% that are ranked higher than 64% of other companies in the Global Agricultural Inputs industry.

The largest shareholder among the gurus is Jeff Ubben (Trades, Portfolio) with 2.29% of outstanding shares followed by Dodge & Cox with 2.01%, NWQ Managers (Trades, Portfolio) with 0.7%, Simons with 0.13%, Joel Greenblatt (Trades, Portfolio) with 0.12%, Grantham with 0.1%, Dalio with 0.08%, Westport Asset Management (Trades, Portfolio) with 0.08% and John Buckingham (Trades, Portfolio) with 0.01%.

ICICI Bank Ltd. (IBN) has a market cap of $22.01 billion. The stock sold for $7.94 Tuesday afternoon with a P/E ratio of 14.22 and according to the DCF calculator is trading with a margin of safety of 47% since its fair value is $15.11. During the last 12 months the price of the stock has dropped by 28% and is now 30.51% below its 52-week high.

The company is a banking company engaged in providing banking and financial services including retail banking, corporate banking and treasury operations.

Its profitability and growth is rated 6/10 with ROE of 60.09% and ROA of 6.16% that are ranked higher than 98% of other companies in the Global Banks - Regional - Asia industry.

Fisher is the company's largest shareholder among the gurus with 0.43% of outstanding shares followed by Simons with 0.21%, Sarah Ketterer (Trades, Portfolio) with 0.21%, Howard Marks (Trades, Portfolio) with 0.14%, Grantham with 0.13% and Prem Watsa (Trades, Portfolio) with 0.05%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

Start a free seven-day trial of Premium Membership to GuruFocus.