7 Undervalued Stocks With Rising Earnings

Stocks with wide margins of safety

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Jul 27, 2017
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Companies with growing earnings per share (EPS) are often good investments as they can return a solid profit to investors. According to the discount cash flow (DCF) calculator, the following are undervalued companies that have grown EPS over a five-year period.

The EPS of Telecom Argentina SA ADRĂ‚ (TEO, Financial) has grown 10% over the last five years.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 35.3% at the price of $27.64. The price-earnings (P/E) ratio is 18.43, and the price has been as high as $29.89 and as low as $17.04 in the last 52 weeks. It is currently 7.53% below its 52-week high and 62.21% above its 52-week low.

WIth a market cap of $5.36 billion, Telecom Argentina is a communication services company. Its products include fixed-line public telecommunication services, international long-distance service, data transmission and internet services.

The company’s largest shareholder among the gurus is George Soros (Trades, Portfolio) with 0.12% of outstanding shares.

The EPS of Bank of the Ozarks Inc. (OZRK, Financial) grew 15% over the last five years.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 35.2% at $48.37. The P/E ratio is 17.74, and the price has been as high as $56.86 and as low as $35.11 in the last 52 weeks. It is 14.93% below its 52-week high and 37.77% above its 52-week low.

With a market cap of $6.2 billion, the bank operates in the financial domain of the U.S.

With 0.33% of outstanding shares,Ă‚ Jim Simons (Trades, Portfolio) is the largest investor among the gurus followed by Julian Robertson (Trades, Portfolio) with 0.16%, Chuck Royce (Trades, Portfolio) with 0.08%, Lee Ainslie (Trades, Portfolio) with 0.04% and Paul Tudor Jones (Trades, Portfolio) with 0.02%.

The EPS of FactSet Research Systems Inc. (FDS, Financial) grew 16% over the last five years.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 2.3% at $166.74. The P/E ratio is 19.60, and the price has been as high as $183.64 and as low as $150.95 in the last 52 weeks. It is 9.20% below its 52-week high and 10.46% above its 52-week low.

It has a market cap of $6.54 billion and is a financial and economic data and analytics service provider. It aggregates content from hundreds of databases, reformats it and then furnishes the data to research analysts and other financial professionals.

The company’s largest shareholder among the gurus is Ron Baron (Trades, Portfolio) with 7.83% of outstanding shares followed by Columbia Wanger (Trades, Portfolio) with 0.56%, Tom Gayner (Trades, Portfolio) with 0.42%, John Rogers (Trades, Portfolio) with 0.06%, Ray Dalio (Trades, Portfolio) with 0.05% and Jones with 0.01%.

Grupo Aeroportuario del Sureste SAB de CVÂ (ASR, Financial)’s EPS grew 16% over the last five years.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 4.6% at $218.37. The P/E ratio is 27.15, and the price has been as high as $229.45 and as low as $131.72 in the last 52 weeks. It is 4.83% below its 52-week high and 65.78% above its 52-week low.

The company has a market cap of $6.61 billion and holds concessions to operate, maintain and develop close to nine airports in the southeast region of Mexico located in Cancun, Cozumel, Merida, Huatulco, Oaxaca, Veracruz, Villahermosa, Tapachula and Minatitlan.

Columbia Wanger with 1.49% of outstanding shares is the largest investor among the gurus followed by Simons with 0.4% and Jeremy Grantham (Trades, Portfolio) with 0.01%.

The EPS of Gildan Activewear Inc. Class AĂ‚ (GIL) grew 19% over the last five years.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 7.7% at $30.45. The P/E ratio is 18.53, and the price has been as high as $31.83 and as low as $23.55 in the last 52 weeks. It is 4.34% below its 52-week high and 29.30% above its 52-week low.

The company has a market cap of $6.85 billion and is an apparel manufacturer in North America. Its suite of products includes T-shirts, fleece, socks and underwear. It has markets in the U.S., Canada and other regions of the world.

The company’s largest shareholder among the gurus is Sarah Ketterer (Trades, Portfolio) with 5.3% of outstanding shares followed by PRIMECAP Management (Trades, Portfolio) with 1.07%, Private Capital (Trades, Portfolio) with 0.38%, Simons with 0.06%, Joel Greenblatt (Trades, Portfolio) with 0.03% and Royce with 0.02%.

Tractor Supply Co. (TSCO, Financial)’s EPS grew 17% over the last five years.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 41.8% at $53.53, the P/E ratio is 16.57, and the price has been as high as $92.11 and as low as $49.87 in the last 52 weeks. It is currently 41.88% below its 52-week high and 7.34% above its 52-week low.

Tractor Supply has a market cap of $6.88 billion and is an operator of rural lifestyle retail stores in the U.S. It is engaged in supplying the needs of recreational farmers and ranchers as well as tradesmen and small businesses.

David Rolfe (Trades, Portfolio) with 1.71% of outstanding shares is the largest investor among the gurus followed by Simons with 1.16%, Columbia Wanger with 0.43%, Baron with 0.18%, Greenblatt with 0.16%, Mario Gabelli (Trades, Portfolio) with 0.08%, Pioneer Investments (Trades, Portfolio) with 0.06% and Rogers with 0.05%.

The EPS of Amerco Inc. (UHAL, Financial) grew 17% over the last five years.

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According to the DCF calculator, the stock is undervalued and trading with a margin of safety of 34% at $381.99. The P/E ratio is 18.80, and the price has been as high as $399.16 and as low as $307.80 in the last 52 weeks. It is currently 4.30% below its 52-week high and 24.10% above its 52-week low.

Amerco has a market cap of $7.49 billion and provides trucks and trailers on rent and sells moving supplies, towing accessories, propane and rents fixed and portable moving and storage units to the "do-it-yourself" mover and management of self-storage properties owned by others.

The company’s largest shareholder among the gurus is David Abrams (Trades, Portfolio) with 1.38% of outstanding shares followed by David Einhorn (Trades, Portfolio) with 1.12%, Robert Bruce (Trades, Portfolio) with 0.98%, Columbia Wanger with 0.63%, Simons with 0.15% and Royce with 0.04%.

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