Value investors may be interested in the following trio of stocks, as they represent companies that have the following characteristics:
- A price-earnings ratio of less than 20.
- A consistent history of earnings and sales generation, having increased both over the past five years with no net losses.
- Optimistic recommendation ratings from Wall Street sell-side analysts.
Komatsu Ltd
The first stock that meets the criteria is Komatsu Ltd (KMTUY, Financial).
The Japanese global manufacturer and seller of construction, mining and utility equipment saw its trailing 12-month revenue per share grow by 9.7% and its earnings per share (EPS) without non-recurring items (NRI) grow by 9.3% per annum over the past five years. The price-earnings ratio (17.73 as of Wednesday) declined by 0.2% over the period in question.
The stock was trading at a price of $21.74 per share at close on Wednesday for a market capitalization of $20.54 billion and a 52-week range of $13.38 to $25.35.
GuruFocus assigned the company a positive financial strength rating of 5 out of 10 and a high profitability rating of 8 out of 10.
Wall Street sell-side analysts have recommended an overweight rating and established an average target price of $22.37 per share for the stock.
Amdocs Ltd
The second stock that qualifies is Amdocs Ltd (DOX, Financial), a Chesterfield, Missouri-based global provider of software and services to several companies operating in communications, media and financial services industries.
The company saw its trailing 12-month revenue per share grow by 5.9% per annum and its trailing 12-month EPS without NRI grow 3.1% per annum over the past five years. The price-earnings ratio (17.45 as of Wednesday) declined by 0.8% over the observed period.
The stock was trading at a price of $62.66 per share at close on Wednesday for a market capitalization of $8.33 billion and a 52-week range of $44.05 to $77.29.
GuruFocus assigned the company a very good financial strength rating of 7 out of 10 and a remarkably high profitability rating of 9 out of 10.
Wall Street sell-side analysts recommend an overweight rating for the stock and have established an average target price of $75 per share.
National Instruments Corp
The third stock that makes the cut is National Instruments Corp (NATI, Financial). Based in Austin, Texas, National Instruments provides engineers andscientists worldwide with a software-centric platform and various systems.
The company saw its trailing 12-month revenue per share grow by 1.3% per annum and its trailing 12-month EPS without NRI grow by 5.7% per annum over the past five years. The price-earnings ratio (19.17 as of Wednesday) decreased by 0.8% over the observed years.
The stock was trading at a price of $37 per share at close on Wednesday for a market capitalization of $4.86 billion and a 52-week range of $20.42 to $47.89.
GuruFocus assigned a very good score of 7 out of 10 to both the company's financial strength rating and its profitability.
Wall Street sell-side analysts recommend a hold rating for this stock and have set an average target price of $39.83 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- A Trio of Stock Picks for the Value Investor
- 3 Fast-Growing Earnings Stocks
- Wall Street Recommends Buying These 2 Falling Knives
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