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Tiziano Frateschi
Tiziano Frateschi
Articles (2711)  | Author's Website |

5 Undervalued Companies With Profitable Businesses

Allegiant 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 Oct. 5, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.

GATX

GATX Corp.'s (GATX) net margin and operating margin have grown 14.15% and 22.21% per annum, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 47.85% margin of safety at $65.44 per share. The price-earnings ratio is 12.44. The share price has been as high as $86.01 and as low as $50.69 in the last 52 weeks; it is currently 23.92% below its 52-week high and 29.10% above its 52-week low.

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The company, which provides railcar leasing and maintenance services, has a market cap of $2.29 billion and an enterprise value of $7.27 billion.

The company's largest guru shareholder is Mario Gabelli (Trades, Portfolio)'s GAMCO Investors with 5.52% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.20% and Ray Dalio (Trades, Portfolio)'s Bridgewater with 0.02%.

Alliance Data Systems

The net margin of Alliance Data Systems Corp. (ADS) has grown 9.75% per annum over the past decade. The operating margin has grown 25.08% per annum over the past decade.

According to the DCF calculator, the stock is undervalued with a 68.15% margin of safety at $45.32 per share. The price-earnings ratio is 23.24. The share price has been as high as $125.78 and as low as $20.51 in the last 52 weeks; it is currently 63.97% below its 52-week high and 120.97% above its 52-week low.

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The company, which operates in the credit services industry, has a market cap of $2.16 billion and an enterprise value of $5.71 billion.

The company's largest guru shareholder is Steven Cohen (Trades, Portfolio)'s Point72 Asset Management with 1.30% of outstanding shares, followed by Simons' firm with 0.56% and Ronald Muhlenkamp (Trades, Portfolio) with 0.26%.

Allegiant

Allegiant Travel Co. (ALGT) has grown its net margin and operating margin by 9.80% and 16.68% per year, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 397.34% margin of safety at $119.65 per share. The price-book ratio is 2.64. The share price has been as high as $183.26 and as low as $60.06 in the last 52 weeks; it is currently 34.71% below its 52-week high and 99.22% above its 52-week low.

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The U.S. travel services provider has a market cap of $1.94 billion and an enterprise value of $2.78 billion.

The company's largest guru shareholder is Diamond Hill Capital (Trades, Portfolio) with 2.81% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 0.47% and PRIMECAP Management (Trades, Portfolio) with 0.24%.

Piedmont Office Realty Trust

The net margin of Piedmont Office Realty Trust Inc. (PDM) has grown 22.73% per annum over the past decade. The operating margin has grown 22.12% annually over the same 10-year period.

According to the DCF calculator, the stock is undervalued with an 60.67% margin of safety at $14.47 per share. The price-earnings ratio is 4.91. The share price has been as high as $24.78 and as low as $12.86 in the last 52 weeks; it is currently 41.61% below its 52-week high and 12.52% above its 52-week low.

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The real estate investment trust has a market cap of $1.82 billion and an enterprise value of $3.45 billion.

The company's largest guru shareholder is Simons' firm with 0.86% of outstanding shares, followed by Paul Tudor Jones (Trades, Portfolio) with 0.07% and Pioneer Investments (Trades, Portfolio) with 0.04%.

Noah Holdings

Noah Holdings Ltd.'s (NOAH) net margin and operating margin have grown 26.66% and 29.88% per year, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 50.41% margin of safety at $27.02 per share. The price-earnings ratio is 14.12. The share price has been as high as $40.18 and as low as $20.42 in the last 52 weeks; it is currently 32.75% below its 52-week high and 32.32% above its 52-week low.

The wealth management service provider has a market cap of $1.67 billion and an enterprise value of $1.12 billion.

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With 1.56% of outstanding shares, Chris Davis (Trades, Portfolio) is the company's largest guru shareholder, followed by Dalio with 0.02%.

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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