A Trio of Stocks Trading Below Intrinsic Value

At current share prices, these securities are offering compelling margins of safety

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Alberto Abaterusso
Nov 09, 2020
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The following three stocks could be good options for investors who are looking for bargains, as their prices are trading 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.

CURO Group Holdings Corp

The first stock value investors may want to consider is CURO Group Holdings Corp (

CURO, Financial), a Wichita, Kansas-based provider of credit services to underbanked consumers in North America and the United Kingdom.

CURO Group Holdings Corp traded at a price of $8.03 per share at close on Friday, standing lower than the intrinsic value of $122.89 from the DCF model for a margin of safety of 93.47%.

The share price has declined by 47.84% over the past year for a market capitalization of $328.31 million and a 52-week range of $3.43 to $16.99.

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GuruFocus has assigned a score of 2 out of 10 to both the company's financial strength and its profitability.

Wall Street recommends a buy rating for the stock with an average target price of $14.25 per share.

The company's largest top fund holder is FFL Partners, LLC with 5.58% of shares outstanding. It is followed by Empyrean Capital Partners with 4.76% of shares outstanding and LP BlackRock Inc. with 3.04% of shares outstanding.

RCM Technologies Inc

The second stock to consider is RCM Technologies Inc (

RCMT, Financial), a Pennsauken, New Jersey-based provider of various business and technology solutions to companies operating in the engineering, construction, specialty health care and information technology industries. RCM Technologies Inc's clients operate in North America, Puerto Rico and Serbia.

RCM Technologies Inc's share price traded at around $1.35 at close on Friday, which is lower than the intrinsic value of $12.90 from the Discounted Cash Flow model, for an 89.53% margin of safety.

The share price performed poorly over the past year as it lost 54.22%, which determined a market capitalization of $15.48 million and a 52-week range of $1.02 to $3.17.

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GuruFocus has assigned a score of 4 out of 10 to the company's financial strength and of 6 out of 10 to its profitability.

As of October, the stock has one recommendation rating of buy with a price target of $4 per share on Wall Street.

With 6.25% of shares outstanding, Jim Simons is the company's largest top fund holder. Amid the other top fund holders of the company, HEARTLAND ADVISORS INC and VANGUARD GROUP INC are worth mentioning, as they own 5.12% and 2.41% of shares outstanding, respectively.

Medallion Financial Corp

The third stock to consider is Medallion Financial Corp (

MFIN, Financial), a New York City-based finance company providing various credit services to fund several commercial businesses including taxi medallions, small scale home and existing business improvements.

Medallion Financial Corp's share price traded at around $3.13 on Friday, which is below the intrinsic value of $31.53 from the DCF valuation model, determining a margin of safety of 89.98%.

The share price has fallen by 53.73% over the past year for a market capitalization of $76.18 million and a 52-week range of $1.29 to $7.40.

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GuruFocus has assigned a score of 2 out of 10 to the company's financial strength and of 5 out of 10 to its profitability.

Wall Street recommends an overweight rating with an average target price of $4.50 per share for the stock.

WELLINGTON MANAGEMENT GROUP LLP dominates in the group of the top fund holders of the company, as it owns 4.26% of shares outstanding. It is followed by Key Colony Management, LLC with 4.19% and VANGUARD GROUP INC with 3.20%.

Disclosure: I have no position in any security mentioned.

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