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Tiziano Frateschi
Tiziano Frateschi
Articles (2751)  | Author's Website |

5 Profitable Companies With a Margin of Safety

Grifols makes the list

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. 24, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.

Grifols

Grifols SA's (GRFS) net margin and operating margin have grown 12.95% and 23.22% per annum, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 14.33% margin of safety at $15.72 per share. The price-earnings ratio is 28.77. The share price has been as high as $25.73 and as low as $13.40 in the last 52 weeks; it is currently 38.90% below its 52-week high and 17.31% above its 52-week low.

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The integrated plasma derivative producer has a market cap of $10.76 billion and an enterprise value of $19.90 billion.

The company's largest guru shareholder is George Soros (Trades, Portfolio) with 0.39% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.01% and Mario Gabelli (Trades, Portfolio)'s GAMCO Investors with 0.01%.

Algonquin

The net margin of Algonquin Power & Utilities Corp. (AQN) has grown 9.89% per annum over the past decade. The operating margin has grown 18.75% per annum over the past decade.

According to the DCF calculator, the stock is undervalued with a 32.39% margin of safety at $14.28 per share. The price-earnings ratio is 14.87. The share price has been as high as $16.85 and as low as $9.53 in the last 52 weeks; it is currently 15.25% below its 52-week high and 49.84% above its 52-week low.

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The company, which operates in the utilities industry, has a market cap of $8.45 billion and an enterprise value of $13.29 billion.

The company's largest guru shareholder is Simons with 0.70% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.03%.

Westlake Chemical

Westlake Chemical Corp. (WLK) has grown its net margin and operating margin by 11.17% and 16.15% per year, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 25.01% margin of safety at $64.47 per share. The price-earnings ratio is 21.35. The share price has been as high as $75.67 and as low as $28.99 in the last 52 weeks; it is currently 14.78% below its 52-week high and 122.39% above its 52-week low.

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The company, which manufactures basic chemicals, vinyls and polymers, has a market cap of $8.23 billion and an enterprise value of $11.78 billion.

The company's largest guru shareholder is Michael Price (Trades, Portfolio) with 0.06% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.04% and Charles Brandes (Trades, Portfolio) with 0.04%.

Mobile TeleSystems

The net margin of Mobile TeleSystems PJSC (MBT) has grown 11.87% per annum over the past decade. The operating margin has grown 23.81% annually over the same 10-year period.

According to the DCF calculator, the stock is undervalued with an 9.95% margin of safety at $8.96 per share. The price-earnings ratio is 11.29. The share price has been as high as $11 and as low as $6.20 in the last 52 weeks; it is currently 18.55% below its 52-week high and 44.52% above its 52-week low.

The Russian wireless telephone operator has a market cap of $7.94 billion and an enterprise value of $12.88 billion.

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The company's largest guru shareholder is Simons' firm with 3.31% of outstanding shares, followed by Sarah Ketterer (Trades, Portfolio) with 0.55% and Pioneer Investments (Trades, Portfolio) with 0.28%.

Snap-on

Snap-on Inc.'s (SNA) net margin and operating margin have grown 12.70% and 20.45% per year, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 39.98% margin of safety at $144.49 per share. The price-earnings ratio is 13.92. The share price has been as high as $172.61 and as low as $90.72 in the last 52 weeks; it is currently 16.29% below its 52-week high and 59.27% above its 52-week low.

The company, which manufactures tools and software for professional technicians, has a market cap of $7.87 billion and an enterprise value of $8.69 billion.

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With 1.79% of outstanding shares, John Rogers (Trades, Portfolio) is the company's largest guru shareholder, followed by T Rowe Price Equity Income Fund (Trades, Portfolio) with 1.07% and Richard Pzena (Trades, Portfolio) with 0.51%.

Disclosure: I do not own any stocks mentioned.

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About the author:

Tiziano Frateschi
You can read about me on www.theextraincome.info, which gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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