These large-cap stocks may be reasonably priced by the market as of Jan. 17, as their trailing 12-month price-earnings ratios are less than 20 and their prices are trading near their Peter Lynch earnings line.
The companies below also have adequate balance sheets to fund current activities and future growth. Their operations are highly profitable, and Wall Street sell-side analysts have issued positive recommendation ratings for them.
Oracle
The first company with the above-listed criteria is Oracle Corp. (ORCL, Financial). Shares of the U.S.-based global computer technology corporation traded at $55.13 at close on Jan. 17 for a market capitalization of $176.84 billion.
The price-earnings ratio is 17.5 versus the industry median of 27.02. The share price rose nearly 25% over the past five years through Jan. 17. Nonetheless, the stock trades close to its fair value according to the Peter Lynch chart.
Oracle has received a moderate GuruFocus rating of 4 out of 10 for its financial strength and a very high rating of 9 out of 10 for its profitability.
Wall Street recommends a hold rating for this stock and has established an average target price of $56.88.
With 5.2% of outstanding shares, Vanguard Group is the company's largest institutional shareholder, followed by BlackRock Inc with 4.92% and State Street with Corp with 2.91%.
Parker-Hannifin
The second company with the above-listed criteria is Parker-Hannifin Corp. (PH, Financial), a Cleveland-based manufacturer and seller of motion and control technologies and systems for worldwide companies operating in the mobile, industrial and aerospace sectors.
Shares of Parker-Hannifin Corporation traded at $207.00 per unit at close on Jan. 17 with a market capitalization of $26.59 billion.
The price-earnings ratio is 18.37 versus the industry median of 18.91. The stock has grown 69.7% in the past five years through Jan. 17 to a price level that is still not far from the fair value, according to the Peter Lynch chart.
GuruFocus assigned the company a positive financial strength rating of 5 out of 10 and a very high profitability rating of 9 out of 10.
Wall Street sell-side analysts recommend an overweight recommendation rating for this stock, with an average target price of $213.68 per unit.
Vanguard Group Inc is the company's biggest top fund holder with 7.44% of outstanding shares, followed by Capital World Investors with 6.36% and Longview Partners (Guernsey) LTD with 5.18%.
American Financial
The third company with the above-listed criteria is American Financial Group Inc. (AFG, Financial).
Shares of the Cincinnati-based property and casualty insurer in the closed at $111.28 per unit on Jan. 17 with a market capitalization of $10.03 billion.
The price-earnings ratio is 15.39 compared to the industry median of 14.01. The share price has grown 86.7% over the past five years through Jan. 17 but still appears fair according to the Peter Lynch chart.
GuruFocus has assigned a moderate rating of 4 out of 10 for the company’s financial strength and a positive rating of 6 out of 10 for its profitability.
Wall Street issued a buy recommendation rating with an average target share price of $122.60.
BlackRock Inc is the company's largest top fund holder with 10.37% of outstanding shares, followed by Vanguard Group Inc with 7.91% and State Street Corp with 3.29%.
Disclosure: I have no positions in any securities mentioned.
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