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 Sept. 15, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.
Boston Properties
Boston Properties Inc.'s (BXP) net margin and operating margin have grown 18.14% and 34.51% per annum, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 6.87% margin of safety at $84.51 per share. The price-earnings ratio is 6.87. The share price has been as high as $147.83 and as low as $71.57 in the last 52 weeks; it is currently 42.84% below its 52-week high and 18.07% above its 52-week low.
The company, which operates in the REITs industry, has a market cap of $13.15 billion and an enterprise value of $27.50 billion.
The company's largest guru shareholder is First Eagle Investment (Trades, Portfolio) with 0.35% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.34% and Pioneer Investments (Trades, Portfolio) with 0.13%.
Eastman Chemical
The net margin of Eastman Chemical Co. (EMN) has grown 12.95% per annum over the past decade. The operating margin has grown 23.22% per annum over the past decade.
According to the DCF calculator, the stock is undervalued with a 11.24% margin of safety at $78.50 per share. The price-earnings ratio is 18.65. The share price has been as high as $83.99 and as low as $34.44 in the last 52 weeks; it is currently 6.54% below its 52-week high and 127.93% above its 52-week low.
The global specialty chemicals manufacturer has a market cap of $10.62 billion and an enterprise value of $16.13 billion.
The company's largest guru shareholder is Pioneer Investments (Trades, Portfolio) with 0.13% of outstanding shares, followed by Robert Olstein (Trades, Portfolio) with 0.06%, Joel Greenblatt (Trades, Portfolio)'s Gotham Asset Management with 0.05% and Lee Ainslie (Trades, Portfolio)'s Maverick Capital with 0.04%.
Packaging Corp.
Packaging Corp. of America (PKG) has grown its net margin and operating margin by 8.11% and 14.36% per year, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 17.89% margin of safety at $103.51 per share. The price-earnings ratio is 19.17. The share price has been as high as $114.78 and as low as $71.05 in the last 52 weeks; it is currently 9.82% below its 52-week high and 45.69% above its 52-week low.
The U.S. containerboard and corrugated packaging manufacturer has a market cap of $9.82 billion and an enterprise value of $11.61 billion.
The company's largest guru shareholder is Pioneer Investments (Trades, Portfolio) with 0.15% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 0.07% and Greenblatt with 0.02%.
Medical Properties
The net margin of Medical Properties Trust Inc. (MPW) has grown 40.56% per annum over the past decade. The operating margin has grown 70.79% annually over the same 10-year period.
According to the DCF calculator, the stock is undervalued with an 21.29% margin of safety at $18.37 per share. The price-earnings ratio is 22.40. The share price has been as high as $24.29 and as low as $12.35 in the last 52 weeks; it is currently 24.37% below its 52-week high and 48.74% above its 52-week low.
The healthcare facility REIT has a market cap of $9.71 billion and an enterprise value of $17.26 billion.
The company's largest guru shareholder is Pioneer Investments (Trades, Portfolio) with 0.13% of outstanding shares, followed by Paul Tudor Jones (Trades, Portfolio) with 0.01%.
Magellan Midstream
Magellan Midstream Partners LP's (MMP) net margin and operating margin have grown 36.52% and 35.12% per year, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 60.62% margin of safety at $36.92 per share. The price-earnings ratio is 8.61. The share price has been as high as $67.62 and as low as $22.02 in the last 52 weeks; it is currently 45.40% below its 52-week high and 67.67% above its 52-week low.
The company, which operates pipelines and storage terminals, has a market cap of $8.31 billion and an enterprise value of $13.26 billion.
With 0.09% of outstanding shares, Louis Moore Bacon (Trades, Portfolio) is the company's largest guru shareholder, followed by George Soros (Trades, Portfolio) with 0.04% and BP Capital Fund Advisors (Trades, Portfolio) with 0.03%.
Disclosure: I do not own any stocks mentioned.
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