7 Undervalued Stocks With Growing EPS

These companies have strong earnings and margins of safety

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Feb 23, 2017
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Companies with growing earnings per share (EPS) are often good investments as they can return a good profit to investors. Here is a selection of the most undervalued companies, according to the DCF calculator, that have a five-year growing EPS.

EPS of Ever-Glory International Group Inc. (EVK) grew by 17% over the last 10 years.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 80% at the price of $2.61. The price-earnings (P/E) ratio is 4.75; the price has been as high as $2.88 and as low as $1.35 in the last 52 weeks and is 9.38% below its 52-week high and 93.33% above its 52-week low

Ever-Glory International Group is an apparel supply chain management provider, manufacturer, distributor and retailer based in the People's Republic of China, with customers in China, the U.S., Europe and Japan.

During the last quarter total sales decreased 7.3% from the third quarter of a year before, due to a 3.4% decrease in its wholesale business and a 13.2% decrease in retail business. Total gross profit for the third quarter of 2016 decreased by 8.4%, and gross profit for the retail business decreased by 12.9%.

EPS of Tandy Leather Factory Inc. (TLF) grew by 10% over the last 10 years.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 20% at the price of $8. The P/E ratio is 11.59; the price has been as high as $8.26 and as low as $6.57 in the last 52 weeks and is 3.15% below its 52-week high and 21.77% above its 52-week low.

Tandy Leather Factory is a retailer and wholesale distributor of leather and related products including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware and do-it-yourself kits.

Third-quarter sales decreased 4%, and earnings per share was flat compared to the same quarter of the prior year. Net income was $1.0 million compared to $1.1 million for the third quarter of 2015 and consolidated gross profit margin for the current quarter was 62.5%, compared to 61.1% in the same quarter of 2016.

EPS of Wipro Ltd ADRÂ (WIT) grew by 15% over the last 10 years.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 7% at the price of $9.6. The P/E ratio is 13.84; the price has been as high as $13.08 and as low as $9.00 in the last 52 weeks and is 26.61% below its 52-week high and 6.67% above its 52-week low.

Wipro is an IT services company. Its businesses provide IT and IT-enabled services that include IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation and others.

Third-quarter gross revenues grew 6.4% year over year, but net income decreased 5.7% year over year. The company reported a 6.2% year-over-year increase for the IT Services segment revenue in U.S. dollar terms.

Ken Fisher (Trades, Portfolio) with 0.08% of outstanding shares is the largest investor among the gurus followed by Jim Simons (Trades, Portfolio) with 0.06%.

EPS of Atwood Oceanics Inc. (ATW) grew by 12% over the last 10 years.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 83% at the price of $9.79. The P/E ratio is 2.69; the price has been as high as $15.37 and as low as $5.78 in the last 52 weeks and is 36.30% below its 52-week high and 69.38% above its 52-week low.

Atwood Oceanics is an offshore drilling contractor, engaged in drilling and completion of exploratory and developmental oil and gas wells.

First-quarter net income was $9.7 million, or 15 cents per diluted share, on revenues of $157.6 million compared to net income of $39.1 million or 60 cents per diluted share on revenues of $307.8 million for the same quarter of a year before. Diluted earnings per share was 15 cents compared to 60 cents in the first quarter of a year before.

The company’s largest shareholder among the gurus is Arnold Van Den Berg (Trades, Portfolio) with 1.52% of outstanding shares followed by Joel Greenblatt (Trades, Portfolio) with 0.87%, Chuck Royce (Trades, Portfolio) with 0.31% and Jeremy Grantham (Trades, Portfolio) with 0.14%.

EPS of Bank Bradesco SA ADRÂ (BBDO) grew by 10% over the last 10 years.

According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 9% at the price of $10.5. The P/E ratio is 11.94; the price has been as high as $10.84 and as low as $5.49 in the last 52 weeks and is 3.14% below its 52-week high and 91.26% above its 52-week low.

Bank Bradesco operates as a commercial bank. The company provides banking and financial products and services in Brazil and abroad to individuals, large, midsized and small companies and local and international corporations and institutions.

Fourth quarter adjusted net income decreased 4.2% from the same quarter of a year before and market capitalization grew 60.7%.

EPS of Bank Bradesco SA ADRÂ (BBD) grew by 10% over the last 10 years.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 4% at the price of $11.09. The P/E ratio is 12.17; the price has been as high as $11.13 and as low as $4.97 in the last 52 weeks and is 0.36% below its 52-week high and 123.14% above its 52-week low.

Bank Bradesco operates as a commercial bank. The company provides banking and financial products and services in Brazil and abroad to individuals, large, midsized and small companies and local and international corporations and institutions.

The largest shareholder among the gurus is Charles Brandes (Trades, Portfolio) with 0.01% of outstanding shares.

Earnings per share (EPS) of Nicholas Financial Inc. (NICK) grew by 8% over the last 10 years.

According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 26% at the price of $11.29. The P/E ratio is 9.74; the price has been as high as $12.50 and as low as $8.56 in the last 52 weeks and is 9.68% below its 52-week high and 31.89% above its 52-week low.

Nicholas Financial, through its subsidiaries, is engaged in acquiring and servicing contracts for purchases of new and used automobiles and light trucks as well as makes direct loans and sells consumer-finance related products.

During the last quarter the company reported a decrease of 40% for diluted earnings per share and 3% decrease for revenue. Net earnings were $1.6 million compared to $2.7 million in the third quarter of a year before.

Simons with 6.96% of outstanding shares is the largest investor among the gurus.

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

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