Companies that are growing their earnings are often good investments because they can return a solid profit to investors.
According to the GuruFocus discounted cash flow calculator as of March 24, the following undervalued companies have a high margin of safety and have grown their earnings per share over a five-year period.
F5 Networks
F5 Networks Inc.'s (FFIV, Financial) earnings per share have grown 3.5% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 39% margin of safety at $98.35 per share. The price-earnings ratio is 15.21. The share price has been as high as $171.78 and as low as $79.78 in the last 52 weeks; it is currently 42.75% below its 52-week high and 23.28% above its 52-week low.
The company, which sells software for networking, security and policy management, has a market cap of $6 billion and an enterprise value of $5.25 billion.
With 4.71% of outstanding shares, Jim Simons (Trades, Portfolio)’ Renaissance Technologies is the company's largest guru shareholder, followed by Pioneer Investments (Trades, Portfolio) with 0.21% and Joel Greenblatt (Trades, Portfolio) with 0.09%.
Infosys
The earnings per share of Infosys Ltd. (INFY, Financial) have grown 8.6% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 14.83% margin of safety at $7.6 per share. The price-earnings ratio is 14.74. The share price has been as high as $12.08 and as low as $6.76 in the last 52 weeks; it is currently 37.09% below its 52-week high and 12.43% above its 52-week low.
The provider of information technology and consulting services has a market cap of $31 billion and an enterprise value of $29 billion.
The company's largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.79% of outstanding shares, followed by Pioneer Investments with 0.04% and Yacktman Asset Management (Trades, Portfolio) with 0.04%.
NetApp
NetApp Inc.'s (NTAP, Financial) earnings per share have grown 3% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 44.34% margin of safety at $37.25 per share. The price-earnings ratio is 8.88. The share price has been as high as $78.35 and as low as $34.66 in the last 52 weeks; it is currently 52.46% below its 52-week high and 7.47% above its 52-week low.
The provider of data management and storage solutions has a market cap of $8.3 billion and an enterprise value of $7.29 billion.
The company's largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 14.27% of outstanding shares, followed by Renaissance Technologies with 2.39% and Pioneer Investments with 1.39%.
Synnex
The earnings per share of Synnex Corp. (SNX, Financial) have grown 15.2% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 56.24% margin of safety at $79.16 per share. The price-earnings ratio is 8.18. The share price has been as high as $153.07 and as low as $52.06 in the last 52 weeks; it is currently 48.29% below its 52-week high and 52.06% above its 52-week low.
The provider of distribution and outsourcing services has a market cap of $4.1 billion and an enterprise value of $6.89 billion.
The company's largest guru shareholder is Sarah Ketterer (Trades, Portfolio) with 4.27% of outstanding shares, followed by Simons’ firm with 0.54% and Pioneer Investments with 0.12%.
SS&C Technologies Holdings
SS&C Technologies Holdings Inc.'s (SSNC, Financial) earnings per share have grown 21.40% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 23.71% margin of safety at $38.96 per share. The price-earnings ratio is 23.80. The share price has been as high as $67.73 and as low as $29.51 in the last 52 weeks; it is currently 42.48% below its 52-week high and 32% above its 52-week low.
The software developer has a market cap of $10 billion and an enterprise value of $17 billion.
With 2.27% of outstanding shares, Ron Baron (Trades, Portfolio) is the company's largest guru shareholder, followed by Pioneer Investments with 0.57% and Simons’ firm with 0.07%.
Celestica
The earnings per share of Celestica Inc. (CLS, Financial) have grown 3.5% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 57% margin of safety at $2.95 per share. The price-earnings ratio is 6.33. The share price has been as high as $9.61 and as low as $2.63 in the last 52 weeks; it is currently 69.30% below its 52-week high and 12.17% above its 52-week low.
The provider of electronic manufacturing services has a market cap of $388 million and an enterprise value of $588 million.
Notable shareholders of the company are Richard Pzena (Trades, Portfolio) with 4.12% of outstanding shares, as well as Donald Smith (Trades, Portfolio) with 2.69% and Charles Brandes (Trades, Portfolio) with 2.48%.
Disclosure: I do not own any stocks mentioned.
Read more here:
- 5 Predictable Stocks With a Margin of Safety
- 5 Guru Stocks Outperforming the Market
- 6 Transportation Stocks With Low Price-Sales Ratios
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
