Companies that are growing their earnings are often good investments. According to the GuruFocus discounted cash flow calculator as of April 20, the following undervalued companies have a high margin of safety and have grown their earnings per share over a five-year period through the end of 2019.
Booking Holdings
Booking Holdings Inc.'s (BKNG, Financial) earnings per share have grown 19.20% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 54.11% margin of safety at $1,432.87 per share. The price-earnings ratio is 13.07. The share price has been as high as $2,094 and as low as $1,107 in the last 52 weeks; it is currently 30.79% below its 52-week high and 30.88% above its 52-week low.
The online travel agency has a market cap of $60.40 billion and an enterprise value of $62.18 billion.
The company's largest guru shareholder is Dodge & Cox with 3.47% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.75%, Yacktman Asset Management (Trades, Portfolio) with 0.52% and Bill Nygren (Trades, Portfolio)’s Oakmark Fund with 0.47%.
Ross Stores
The earnings per share of Ross Stores Inc. (ROST, Financial) have grown 17% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with an 15.15% margin of safety at $91.72 per share. The price-earnings ratio is 19.94. The share price has been as high as $124.16 and as low as $56.30 in the last 52 weeks; it is currently 26.13% below its 52-week high and 62.91 % above its 52-week low.
The off-price apparel and home fashion retailer has a market cap of $32.60 billion and an enterprise value of $34.73 billion.
The company's largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 3.19% of outstanding shares, followed by Pioneer Investments with 1.23% and Frank Sands (Trades, Portfolio) with 0.10%.
O'Reilly Automotive
O'Reilly Automotive Inc.'s (ORLY, Financial) earnings per share have grown 19.70% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 26.66% margin of safety at $373.51 per share. The price-earnings ratio is 20.88. The share price has been as high as $454.31 and as low as $251.51 in the last 52 weeks; it is currently 18.56% below its 52-week high and 47.11% above its 52-week low.
The company, which sells aftermarket automotive parts and accessories, has a market cap of $27.73 billion and an enterprise value of $33.56 billion.
The company's largest guru shareholder is Chuck Akre (Trades, Portfolio) with 2.54% of outstanding shares, followed by Pioneer Investments with 1.0% and David Abrams (Trades, Portfolio) with 0.70%.
Magna International
The earnings per share of Magna International Inc. (MGA, Financial) have grown 8.50% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with an 38.30% margin of safety at $36.25 per share. The price-earnings ratio is 6.95. The share price has been as high as $57.09 and as low as $22.75 in the last 52 weeks; it is currently 36.50% below its 52-week high and 59.34% above its 52-week low.
The company, which operates in the vehicles and auto parts industry, has a market cap of $10.84 billion and an enterprise value of $14.64 billion.
The company's largest guru shareholder is Hotchkis & Wiley with 2.36% of outstanding shares, followed by Pioneer Investments with 2.12% and Joel Greenblatt (Trades, Portfolio)’s Gotham Asset Management with 0.04%.
NVR
NVR Inc.'s (NVR, Financial) earnings per share have grown 28.40% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 53.68% margin of safety at $2,917 per share. The price-earnings ratio is 13.19. The share price has been as high as $4,071 and as low as $2,043 in the last 52 weeks; it is currently 30.24% below its 52-week high and 39.01% above its 52-week low.
The American homebuilder has a market cap of $10.76 billion and an enterprise value of $10.30 billion.
With 2.59% of outstanding shares, Diamond Hill Capital (Trades, Portfolio) is the company's largest guru shareholder, followed by the Smead Value Fund (Trades, Portfolio) with 0.66% and Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.52%.
CarMax
The earnings per share of CarMax Inc. (KMX, Financial) have grown 14.80% per annum over the past five years.
According to the DCF calculator, the stock is undervalued with a 38.60% margin of safety at $65.22 per share. The price-earnings ratio is 12.24. The share price has been as high as $103.18 and as low as $37.59 in the last 52 weeks; it is currently 38.54% below its 52-week high and 68.69% above its 52-week low.
The company, which sells used and new cars, has a market cap of $10.64 billion and an enterprise value of $26.43 billion.
Notable shareholders of the company are PRIMECAP Management with 6.64% of outstanding shares, Ruane Cunniff (Trades, Portfolio) with 4.86%, Chuck Akre (Trades, Portfolio) with 4.13% and Tom Gayner (Trades, Portfolio) with 3.01%.
Disclosure: I do not own any stocks mentioned.
Read more here:
- 6 Profitable Companies With a Margin of Safety
- Insiders Roundup: National CineMedia, Cloudera
- 5 Utilities Outperforming the Market
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