21 Best Undervalued Stocks of the Week

These are the top choices according to ModernGraham

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Aug 30, 2016
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I evaluated 60 different companies this week to determine whether they are suitable for Defensive Investors, those unwilling to do substantial research, or Enterprising Investors, those who are willing to do such research. I also put each company through the ModernGraham valuation model based on Benjamin Graham's value investing formulas in order to determine an intrinsic value for each.

Out of those 60 companies, only 21 were found to be undervalued or fairly valued and suitable for either Defensive or Enterprising Investors. Therefore, these 21 companies are the best undervalued stocks of the week.

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The elite

The following companies were found to be suitable for either the Defensive Investor or Enterprising Investor and undervalued:

American International Group

American International Group Inc. (AIG, Financial) is an insurance company.

American International is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last 10 years and the poor dividend history. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $-56.58 in 2012 to an estimated $3.64 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 3.83% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into American International revealed the company was trading below its Graham Number of $82.15. The company pays a dividend of $1.2 per share for a yield of 2%. Its PEmg (price over earnings per share - ModernGraham) was 16.16, which was below the industry average of 16.56, which by some methods of valuation makes it one of the most undervalued stocks in its industry. (See the full valuation)

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Amgen

Amgen Inc. (AMGN, Financial) is a biotechnology company.

Amgen is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $4.73 in 2012 to an estimated $8.41 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 5.92% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Amgen revealed the company was trading above its Graham Number of $96.05. The company pays a dividend of $3.58 per share for a yield of 2.1%, putting it among the best dividend-paying stocks today. Its PEmg was 20.35, which was below the industry average of 38.69, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-3.16. (See the full valuation)

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Comerica

Comerica Inc. (CMA, Financial) is a financial services company.

Comerica is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last 10 years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $1.6 in 2012 to an estimated $2.64 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 4.41% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Comerica revealed the company was trading above its Graham Number of $45.5. The company pays a dividend of 85 cents per share for a yield of 1.9%. Its PEmg was 17.33, which was above the industry average of 13.43. (See the full valuation)

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Equity Residential

Equity Residential (EQR, Financial) is a real estate investment trust.

Equity Residential qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $2.15 in 2012 to an estimated $5.79 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.39% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Equity Residential revealed the company was trading below its Graham Number of $90.07. The company pays a dividend of $2.11 per share for a yield of 3.2%, putting it among the best dividend paying stocks today. Its PEmg was 11.29, which was below the industry average of 34.03, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-24.85. (See the full valuation)

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Fossil Group

Fossil Group Inc. (FOSL, Financial) is a design, marketing and distribution company that specializes in consumer fashion accessories.

Fossil Group is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size and poor dividend history. The Enterprising Investor is only concerned with the lack of dividends. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $4.26 in 2012 to an estimated $4.36 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 0.81% annual earnings loss over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Fossil Group revealed the company was trading above its Graham Number of $25.49. The company does not pay a dividend. Its PEmg was 6.88, which was below the industry average of 49.91, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of 64 cents. (See the full valuation)

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Franklin Resources

Franklin Resources Inc. (BEN, Financial) is a holding company.

Franklin Resources qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial position. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $2.5 in 2012 to an estimated $3.2 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.5% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Franklin Resources revealed the company was trading above its Graham Number of $35.55. The company pays a dividend of 69 cents per share for a yield of 1.9%. Its PEmg was 11.51, which was below the industry average of 19.87, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $14.41. (See the full valuation)

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Kimco Realty

Kimco Realty Corp. (KIM, Financial) is a real estate investment trust.

Kimco Realty is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last 10 years and the high PEmg ratio. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from 29 cents in 2012 to an estimated $1.24 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 7.79% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Kimco Realty revealed the company was trading above its Graham Number of $19.53. The company pays a dividend of $1.01 per share for a yield of 3.4%, putting it among the best dividend-paying stocks today. Its PEmg was 24.09, which was below the industry average of 34.03, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-13.21. (See the full valuation)

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Robert Half International

Robert Half International Inc. (RHI) provides specialized staffing and risk consulting services.

Robert Half International qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $1 in 2012 to an estimated $2.41 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 3.79% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Robert Half International revealed the company was trading above its Graham Number of $22.3. The company pays a dividend of 84 cents per share for a yield of 2.2%, putting it among the best dividend-paying stocks today. Its PEmg was 16.07, which was below the industry average of 21.38, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $5.37. (See the full valuation)

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Skyworks Solutions

Skyworks Solutions Inc. (SWKS) is engaged in the production of analog semiconductors.

Skyworks Solutions is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from 94 cents in 2012 to an estimated $3.59 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 6.14% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Skyworks Solutions revealed the company was trading above its Graham Number of $47.14. The company pays a dividend of $1.04 per share for a yield of 1.4%. Its PEmg was 20.78, which was below the industry average of 22.64, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $8.54. (See the full valuation)

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Snap-on

Snap-On Inc. (SNA) is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users.

Snap-on qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $4.21 in 2012 to an estimated $7.73 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 5.71% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Snap-on revealed the company was trading above its Graham Number of $94.91. The company pays a dividend of $2.36 per share, for a yield of 1.5% Its PEmg was 19.92, which was below the industry average of 20.76, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-1.16. (See the full valuation)

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Starwood Property Trust

Starwood Property Trust Inc. (STWD) is a real estate investment trust.

Starwood Property Trust is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last 10 years and the poor dividend history. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $1.17 in 2012 to an estimated $1.98 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.4% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Starwood Property Trust revealed the company was trading below its Graham Number of $27.64. The company pays a dividend of $1.92 per share for a yield of 8.6%, putting it among the best dividend paying stocks today. Its PEmg was 11.3, which was below the industry average of 34.03, which by some methods of valuation makes it one of the most undervalued stocks in its industry. (See the full valuation)

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SunTrust Banks Inc (STI)

SunTrust Banks Inc. (STI) is a bank holding company and a financial holding company.

SunTrust Banks is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last 10 years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $1.02 in 2012 to an estimated $3.29 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 2.24% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into SunTrust Banks revealed the company was trading below its Graham Number of $59.54. The company pays a dividend of 96 cents per share for a yield of 2.2%, putting it among the best dividend-paying stocks today. Its PEmg was 12.98, which was below the industry average of 13.43, which by some methods of valuation makes it one of the most undervalued stocks in its industry. (See the full valuation)

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Symantec Corporation

Symantec Corporation (SYMC) provides security and information management solutions.

Symantec is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last 10 years, and the poor dividend history, and the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from 50 cents in 2013 to an estimated $1.84 for 2017. This level of demonstrated earnings growth outpaces the market's implied estimate of 2.19% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Symantec revealed the company was trading above its Graham Number of $12.19. The company pays a dividend of 53 cents per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg was 12.88, which was below the industry average of 36.31, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-1.56. (See the full valuation)

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T. Rowe Price Group

T. Rowe Price Group Inc. (TROW) is a financial services holding company.

T. Rowe Price Group qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be nduervalued after growing its EPSmg from $2.75 in 2012 to an estimated $4.22 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 3.89% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into T. Rowe Price Group revealed the company was trading above its Graham Number of $41.69. The company pays a dividend of $2.12 per share, for a yield of 3.1%, putting it among the best dividend-paying stocks today. Its PEmg was 16.27, which was below the industry average of 19.87, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of -7 cents. (See the full valuation)

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Tyson Foods

Tyson Foods Inc. (TSN) is a food company.

Tyson Foods is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last 10 years and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $1.28 in 2012 to an estimated $3.17 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 7.76% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Tyson Foods revealed the company was trading above its Graham Number of $52.23. The company pays a dividend of 55 cents per share for a yield of 0.7%. Its PEmg was 24.01, which was below the industry average of 30.19, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-19.94. (See the full valuation)

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Valero Energy

Valero Energy Corporation (VLO), through Valero Energy Partners LP (VLP), owns, operates, develops and acquires crude oil and refined petroleum products pipelines, terminals and other transportation and logistics assets.

Valero Energy Corporation is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio and insufficient earnings stability over the last 10 years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg from $1.71 in 2012 to an estimated $5.39 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 0.84% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Valero Energy Corporation revealed the company was trading above its Graham Number of $54.08. The company pays a dividend of $2.1 per share, for a yield of 3.8%, putting it among the best dividend-paying stocks today. Its PEmg was 10.18, which was below the industry average of 55.24, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-18.5. (See the full valuation)

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The good

The following companies were found to be suitable for the Defensive Investor or Enterprising Investor and fairly valued:

Amphenol

Amphenol Corporation (APH, Financial) is a designer, manufacturer and marketer of electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and specialty cable.

Amphenol is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $1.45 in 2012 to an estimated $2.3 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 9.04% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Amphenol revealed the company was trading above its Graham Number of $25.53. The company pays a dividend of 56 cents per share, for a yield of 0.9%. Its PEmg was 26.58, which was above the industry average of 22.64. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-4.23. (See the full valuation)

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Assurant

Assurant Inc. (AIZ, Financial) is a provider of specialty protection products and related services.

Assurant qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial position. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be fairly valued after growing its EPSmg from $4.59 in 2012 to an estimated $6 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 3.04% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Assurant revealed the company was trading below its Graham Number of $123.04. The company pays a dividend of $1.8 per share, for a yield of 2.1%, putting it among the best dividend-paying stocks today. Its PEmg was 14.59, which was below the industry average of 16.56, which by some methods of valuation makes it one of the most undervalued stocks in its industry. (See the full valuation)

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Chubb Limited

Chubb Limited (CB, Financial) formerly ACE Limited, is a holding company that provides a range of insurance and reinsurance products to insureds.

Chubb is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last 10 years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be fairly valued after growing its EPSmg from $6.9 in 2012 to an estimated $8.29 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 3.37% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Chubb revealed the company was trading below its Graham Number of $126.36. The company pays a dividend of $2.7 per share, for a yield of 2.1%, putting it among the best dividend-paying stocks today. Its PEmg was 15.24, which was below the industry average of 16.56, which by some methods of valuation makes it one of the most undervalued stocks in its industry. (See the full valuation)

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Leggett & Platt

Leggett & Platt Inc. (LEG, Financial) is a manufacturer of engineered components and products found in homes, offices, automobiles and commercial aircraft.

Leggett & Platt is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last 10 years and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be fairly valued after growing its EPSmg from $1.21 in 2012 to an estimated $1.93 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 9.31% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Leggett & Platt revealed the company was trading above its Graham Number of $21.85. The company pays a dividend of $1.3 per share, for a yield of 2.5%, putting it among the best dividend-paying stocks today. Its PEmg was 27.11, which was below the industry average of 27.31, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-4.2. (See the full valuation)

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Moody's Corporation

Moody's Corporation (Moody's) is a provider of credit ratings; credit, capital markets and economic related research, data and analytical tools; software solutions and related risk management services; quantitative credit risk measures, financial services training and certification services, and outsourced research and analytical services to financial institution customers.

Moody's is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.46 in 2012 to an estimated $4.3 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 8.04% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on the Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Moody's revealed the company was trading above its Graham Number of $0. The company pays a dividend of $1.42 per share, for a yield of 1.3%. Its PEmg was 24.58, which was above the industry average of 19.87. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-13.35. (See the full valuation)

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Disclosure:Â The author held a long position in Starwood Property Trust but did not hold a position in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.

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