Companies that have positive and steady net margins and operating margins are often good investments because they can return a solid profit to investors.
According to the GuruFocus discounted cash flow calculator as of July 2, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.
Intel
Intel Corp.'s (INTC) net margin and operating margin have grown 20.79% and 28.69% per annum, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 29.47% margin of safety at $58.81 per share. The price-earnings ratio is 11.39. The share price has been as high as $69.29 and as low as $43.63 in the last 52 weeks; it is currently 14.54% below its 52-week high and 35.72% above its 52-week low.
The chipmaker has a market cap of $249 billion and an enterprise value of $268 billion.
The company's largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.66% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 0.60% and Chris Davis (Trades, Portfolio) with 0.20%.
China Mobile
The net margin of China Mobile Ltd. (CHL) has grown 16.50% per annum over the past decade. The operating margin has grown 18.97% per annum over the past decade.
According to the DCF calculator, the stock is undervalued with a 15.56% margin of safety at $33.71 per share. The price-earnings ratio is 9.02. The share price has been as high as $45.88 and as low as $30.12 in the last 52 weeks; it is currently 23.69% below its 52-week high and 16.24% above its 52-week low.
The Chinese telecom operator has a market cap of $138.05 billion and an enterprise value of $88.78 billion.
The company's largest guru shareholder is Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.18% of outstanding shares, followed by Sarah Ketterer (Trades, Portfolio)’s Causeway Capital with 0.04% and John Rogers (Trades, Portfolio) with 0.02%.
Fleetcor Technologies
Fleetcor Technologies Inc. (FLT) has grown its net margin and operating margin by 30.65% and 46.13% per year, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 7.39% margin of safety at $254.69 per share. The price-earnings ratio is 26.37. The share price has been as high as $329.85 and as low as $168.51 in the last 52 weeks; it is currently 20.97% below its 52-week high and 54.70% above its 52-week low.
The company, which provides specialized payment products, has a market cap of $26.37 billion and an enterprise value of $25.43 billion.
The company's largest guru shareholder is Chase Coleman (Trades, Portfolio)’s Tiger Global Management with 1.55% of outstanding shares, followed by Lee Ainslie (Trades, Portfolio)’s Maverick Capital with 1.48%, Spiros Segalas (Trades, Portfolio) with 1.04% and Ron Baron (Trades, Portfolio) with 0.29%.
CGI
The net margin of CGI Inc. (GIB) has grown 9.63% per annum over the past decade. The operating margin has grown 14.01% annually over a 10-year period.
According to the DCF calculator, the stock is undervalued with an 29.47% margin of safety at $63.29 per share. The price-earnings ratio is 18.80. The share price has been as high as $87.13 and as low as $46.32 in the last 52 weeks; it is currently 26.84% below its 52-week high and 37.61% above its 52-week low.
The IT-services provider has a market cap of $16.23 billion and an enterprise value of $19.04 billion.
The company's largest guru shareholder is Renaissance Technologies with 0.20% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.05% and Pioneer Investments (Trades, Portfolio) with 0.04%.
ViacomCBS
ViacomCBS Inc.'s (VIAC) net margin and operating margin have grown 11.52% and 20.79% per year, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 81.20% margin of safety at $23.60 per share. The price-earnings ratio is 5.33. The share price has been as high as $53.71 and as low as $10.10 in the last 52 weeks; it is currently 55.30% below its 52-week high and 137.72% above its 52-week low.
The company, which operates in the media industry, has a market cap of $14.64 billion and an enterprise value of $34.50 billion.
With 3.66% of outstanding shares, Seth Klarman (Trades, Portfolio)’s The Baupost Group is the company's largest guru shareholder, followed by Larry Robbins (Trades, Portfolio)’ Glenview Capital with 1.51% and Rogers with 1.01%.
Disclosure: I do not own any stocks mentioned.
Read more here:
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- 5 Popular Defensive Stocks
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