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Alberto Abaterusso
Alberto Abaterusso
Articles (2464) 

A Trio of Stocks Trading Below the Intrinsic Value

Investing in them at current market valuations offers an appealing margin of safety

August 23, 2020 | About:

Investors who are looking for bargains may be interested in the following stocks, as their share prices are standing below the intrinsic value calculated by GuruFocus' free cash flow-based Discounted Cash Flow (DCF) calculator.

These stocks have also received optimistic recommendation ratings from sell-side analysts on Wall Street.

Veritiv Corp

The first stock value investors may be interested in is Veritiv Corp (NYSE:VRTV), an Atlanta, Georgia-based supplier of facility solutions, packaging, print and publishing products and other related services.

Veritiv Corp was trading at a price of $17.22 per share at close on Friday, which is lower than the value of $194.13 from the DCF model, for a margin of safety of 91.13%.

The share price went up by 5.51% over the past year for a market capitalization of $273.69 million and a 52-week range of $5.70 to $24.66.

GuruFocus has assigned a positive score of 5 out of 10 to the company's financial strength and a moderate score of 4 out of 10 to its profitability.

One sell-side analyst on Wall Street issued a buy recommendation rating for this stock and has produced a target price of $26 per share.

The company's top fund holder is Seth Klarman (Trades, Portfolio) with 22.43% of shares outstanding, followed by BAIN CAPITAL INVESTORS LLC with 17.52% and BlackRock Inc. with 12.20%.

IRSA Inversiones y Representaciones SA

The second stock to be under consideration is IRSA Inversiones y Representaciones SA (NYSE:IRS), an Argentinian real estate company focusing on shopping malls and office buildings for rental purposes and the acquisition and management of hotels. The company also engages in the development of residential properties and land reserves.

IRSA Inversiones y Representaciones SA's share price traded at $3.43 at close on Friday, which is standing below the DCF valuation of $135.55, for a 97.79% margin of safety.

The share price didn't perform well over the past year as it fell by 42.43%, determining a market capitalization of $198.49 million and a 52-week range of $2.77 to $7.86.

GuruFocus has assigned a low score of 3 out of 10 to the company's financial strength and a very good score of 7 out of 10 to its profitability.

Two sell-side analysts on Wall Street issued recommendation ratings on this stock with an average rating of overweight and an average target price of $5.53 per share.

With 4.61% of shares outstanding, Autonomy Capital (Jersey) L.P. is the company's top fund holder, followed by Macquarie Group Ltd with 3.25% and VR Advisory Services Ltd with 3.22%.

American Axle & Mfg Holdings Inc

The third stock investors may want to have a look at is American Axle & Mfg Holdings Inc (NYSE:AXL), a Detroit, Michigan-based manufacturer of driveline and other metal forming products for automotive markets in the Americas, Europe and Asia.

American Axle & Mfg Holdings Inc's share price closed at $6.91 on Friday, which is substantially below the DCF valuation of $11.23, yielding a 38.47% margin of safety.

The share price has increased by 8.65% over the past year for a market capitalization of $782.72 million and a 52-week range of $2.50 to $11.26.

GuruFocus has assigned a low score of 3 out of 10 to the company's financial strength and a positive score of 6 out of 10 to its profitability.

Wall Street sell-side analysts recommend an overweight rating with an average target price of $8.89 per share for this stock.

BlackRock Inc. and VANGUARD GROUP INC lead the group of the top fund holders of the company, owning 15.07% and 10.87%, respectively.

Disclosure: I have no position in any security mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

Rating: 4.0/5 (1 vote)

Voters:

Comments

Praveen Chawla
Praveen Chawla premium member - 3 months ago

Nice picks. I already own VRTV.
Now IRSA seems amazingly cheap. FCF is 2x the market cap according to GF.

Please leave your comment:



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