Companies that are growing their earnings are often good investments because they can return a solid profit to investors.
According to GuruFocus' discounted cash flow calculator as of Jan. 14, the following undervalued companies have a high margin of safety and have also grown their earnings per share over a five-year period.
PACCAR
PACCAR Inc.'s (PCAR, Financial) earnings per share have grown 8.10% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 49.90% margin of safety at $78 per share. The price-earnings ratio is 11.2. The share price has been as high as $83.41 and as low as $58.66 in the last 52 weeks; it is currently 6.41% below its 52-week high and 33.07% above its 52-week low.
The company, which manufactures medium- and heavy-duty commercial vehicles, has a market cap of $27 billion and an enterprise value of $33.08 billion.
With 0.42% of outstanding shares, Hotchkis & Wiley is the company's largest guru shareholder, followed by Pioneer Investments (Trades, Portfolio) with 0.32%.
AutoZone
The earnings per share of AutoZone Inc. (AZO, Financial) have grown 13.60% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 21.41% margin of safety at $1,120 per share. The price-earnings ratio is 17.84. The share price has been as high as $1,274.41 and as low as $803.28 in the last 52 weeks; it is currently 11.46% below its 52-week high and 40.47% above its 52-week low.
The company, which provides aftermarket automotive parts, tools and accessories, has a market cap of $26.62 billion and an enterprise value of $34.49 billion.
The company's largest guru shareholder is Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.72% of outstanding shares, followed by Tweedy Browne (Trades, Portfolio) with 0.44% and Joel Greenblatt (Trades, Portfolio) with 0.08%.
Centene
Centene Corp.'s (CNC, Financial) earnings per share have grown 26.20% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 31.05% margin of safety at $63.40 per share. The price-earnings ratio is 19.63. The share price has been as high as $69.25 and as low as $41.62 in the last 52 weeks; it is currently 8.44% below its 52-week high and 52.31% above its 52-week low.
The health care plans provider has a market cap of $26.23 billion and an enterprise value of $26.35 billion.
The company's largest guru shareholder is Andreas Halvorsen (Trades, Portfolio) with 3.56% of outstanding shares, followed by Lee Ainslie (Trades, Portfolio) with 2.09% and the Vanguard Health Care Fund (Trades, Portfolio) with 1.32%.
Credicorp
The earnings per share of Credicorp Ltd. (BAP, Financial) have grown 20.40% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 29.92% margin of safety at $210 per share. The price-earnings ratio is 13.16. The share price has been as high as $252.49 and as low as $199.83 in the last 52 weeks; it is currently 16.21% below its 52-week high and 5.87% above its 52-week low.
The company, which provides trade finance, corporate finance and leasing services, has a market cap of $16.87 billion and an enterprise value of $8.75 billion.
The company's largest guru shareholder is Al Gore (Trades, Portfolio) with 1.70% of outstanding shares, followed by Ken Fisher (Trades, Portfolio) with 1.43% and Sarah Ketterer (Trades, Portfolio) with 0.40%.
Magna International
Magna International Inc.'s (MGA, Financial) earnings per share have grown 17.80% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 9% margin of safety at $53.6 per share. The price-earnings ratio is 9.58. The share price has been as high as $57.09 and as low as $42.51 in the last 52 weeks; it is currently 7.06% below its 52-week high and 24.82% above its 52-week low.
The company, which operates in the vehicles and parts industry, has a market cap of $16.23 billion and an enterprise value of $21.15 billion.
Some notable shareholders of the company are Pioneer Investments with 0.11% of outstanding shares, Greenblatt with 0.04% and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates with 0.03%.
Disclosure: I do not own any stocks mentioned.
Read more here:
- 6 Stocks Trading WIth Low Price-Sales Ratios
- 6 Cheap Stocks Trading at 52-Week Highs
- 5 Health Care Stocks Gurus Are Buying
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