The following stocks appear to be undervalued as of Feb. 11 since they have a price-earnings ratio below 20 and a price-earnings to growth ratio of less than 1.
Wall Street sell-side analysts have also issued positive recommendation ratings for these companies.
BYD Electronic
The first company that meets these criteria is BYD Electronic (International) Co. Ltd. (BYDIF, Financial).
Shares of the Chinese manufacturer and seller of mobile handset components and modules closed at $1.95 on Tuesday for a market capitalization of $4.46 billion.
The price-earnings ratio is 17.22 versus the industry median of 19.22 and the PEG ratio is 0.54 versus the industry median of 1.6.
The stock has climbed 95% over the past five years through Feb. 11. Nevertheless, the stock is slightly above the Peter Lynch earnings line.
BYD Electronic has received a high GuruFocus rating of 8 out of 10 for both its financial strength and for its profitability.
Wall Street recommends an overweight rating for the stock, which means it is expected to outperform, and has also established an average target price of 13.16 yuan ($1.9).
Stamps.com
The second company that meets the above-listed criteria is Stamps.com Inc. (STMP, Financial).
Shares of the El Segundo, California-based provider of internet-based mailing and shipping services to U.S. and European clients traded at a price of $83.80 per unit on Tuesday for a market capitalization of $1.45 billion.
The price-earnings ratio is 18.96 versus the industry median of 25.99 and the PEG ratio is 0.29 versus the industry median of 2.15.
The stock has gained 47.7% over the past five years through Feb. 11. Regardless, it is still trading close to the Peter Lynch earnings line.
GuruFocus assigned the company a high financial strength rating of 8 out of 10 and a very high profitability rating of 9 out of 10.
Wall Street issued an overweight recommendation rating for the stock with an average target price of $94 per share.
Duluth Holdings
The third company that meets the criteria is Duluth Holdings Inc. (DLTH, Financial).
Shares of the Mount Horeb, Wisconsin-based apparel retailer closed at $8.35 on Tuesday for a market capitalization of $274.3 million.
The price-earnings ratio is 16.94 versus the industry median of 17.06 and the PEG ratio is 0.84 versus the industry median of 1.92.
The stock has fallen nearly 41% over the past five years through Feb. 11. Nevertheless, the share price is still above the Peter Lynch earnings line.
GuruFocus has assigned Duluth Holdings a moderate rating of 4 out of 10 for its financial strength and a very positive rating of 7 out of 10 for its profitability.
Wall Street sell-side analysts recommend a hold rating for the stock and have set an average target price of $11.67 per share.
Disclosure: I have no positions in any securities mentioned.
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