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

The elite

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

AFLAC

AFLAC Inc. (AFL, Financial) 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 undervalued after growing its EPSmg (normalized earnings) from $4.72 in 2012 to an estimated $6.22 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.36% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.

At the time of valuation, further research into AFLAC revealed the company was trading below its Graham Number of $87.98. The company pays a dividend of $1.64 per share for a yield of 2.3%, putting it among the best dividend paying stocks today. Its PEmg (price-earnings [P/E] per share – ModernGraham) was 11.22, which was below the industry average of 18.78. By some methods of valuation that makes it one of the most undervalued stocks in its industry. (See the full valuation.)

Alaska Air Group

Alaska Air Group Inc. (ALK, Financial) 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, the poor dividend history and the high price-book (P/B) 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 (normalized earnings) from $1.57 in 2012 to an estimated $5.53 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 returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Alaska Air Group revealed the company was trading above its Graham Number of $59.71. The company pays a dividend of $1.03 per share for a yield of 1.1%. Its PEmg (P/E per share – ModernGraham) was 16.15, which was below the industry average of 17.26. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its net current asset value (NCAV) of $-18.05. (See the full valuation.)

Chesapeake Lodging Trust

Chesapeake Lodging Trust (CHSP, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability over the last 10 years, the poor dividend history 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 (normalized earnings) from 29 cents in 2012 to an estimated 98 cents for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 9.4% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Chesapeake Lodging Trust revealed the company was trading above its Graham Number of $22.35. The company pays a dividend of $1.6 per share for a yield of 6%, putting it among the best dividend-paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 27.29, which was below the industry average of 31.91. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its net current asset value (NCAV) of $-12.24. (See the full valuation.)

Innospec

Innospec Inc. (IOSP, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, poor dividend history and the high P/B 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 (normalized earnings) from $2.11 in 2012 to an estimated $3.68 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 5.33% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Innospec revealed the company was trading above its Graham Number of $44.72. The company pays a dividend of 64 cents per share, for a yield of 0.9%. Its PEmg (price over earnings per share – ModernGraham) was 19.15, which was below the industry average of 22.46. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its net current asset value (NCAV) of $3.59. (See the full valuation.)

Kansas City Southern

Kansas City Southern (KSU, Financial) does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history and the high PEmg 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 explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.48 in 2012 to an estimated $4.17 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 5.99% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Kansas City Southern revealed the company was trading above its Graham Number of $60.54. The company pays a dividend of $1.32 per share for a yield of 1.5%. Its PEmg (price over earnings per share – ModernGraham) was 20.49, which was above the industry average of 20.23. Finally, the company was trading above its net current asset value (NCAV) of $-37. (See the full valuation.)

Motorola Solutions

Motorola Solutions Inc. (MSI, Financial) 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, the poor dividend history and the high PEmg and P/B 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 (normalized earnings) from $1.38 in 2012 to an estimated $3.82 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 6.76% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Motorola Solutions revealed the company was trading above its Graham Number of $0. The company pays a dividend of $1.64 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 22.02, which was below the industry average of 38.13. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its net current asset value (NCAV) of $-32.28. (See the full valuation.)

Seneca Foods

Seneca Foods Corp. (SENEA, Financial) 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 (normalized earnings) from $1.73 in 2012 to an estimated $2.72 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 3.19% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Seneca Foods revealed the company was trading below its Graham Number of $69.2. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 14.87, which was below the industry average of 24.74. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its net current asset value (NCAV) of $16.89. (See the full valuation.)

The good

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

SEI Investments

SEI Investments Co. (SEIC, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and P/B 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 fairly valued after growing its EPSmg (normalized earnings) from $1.1 in 2012 to an estimated $1.85 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 9.13% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into SEI Investments revealed the company was trading above its Graham Number of $19.12. The company pays a dividend of 52 cents per share for a yield of 1.1%. Its PEmg (price over earnings per share – ModernGraham) was 26.76, which was above the industry average of 21.33. Finally, the company was trading above its net current asset value (NCAV) of $4.37. (See the full valuation.)

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

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