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Alberto Abaterusso
Alberto Abaterusso
Articles (2468) 

3 Potential Bargains for the Value Investor

These stocks are trading at compelling valuations

November 22, 2020 | About:

As of Nov. 20, three stocks appear to be undervalued by the market as their price-earnings ratios without non-recurring items trade below 20 while their price-earnings to growth (PEG) ratios are less than 1.

Furthermore, these stocks have received positive recommendation ratings from sell-side analysts on Wall Street.

Manulife Financial

The first company that makes the cut is Manulife Financial Corp. (NYSE:MFC), a Canadian insurance and asset management company, serving individuals and institutional clients in North America and internationally.

As of Nov. 20, the price-earnings ratio without NRI is 8.36, which appeals more than the industry median of 12.2, while the PEG ratio of 0.96 is also more appealing than the industry median of 1.93.

On Nov. 20, the closing price was $16.44 per share, net earnings without NRI was $1.97 per share for the trailing 12 months ended in September 2020 and the five-year Ebitda growth rate was 8.7%.

The share price decreased by 16.1% over the past year, determining a market capitalization of $31.86 billion and fluctuating in a 52-week range of $8.62 to $21.23.

GuruFocus assigned a score of 5 out of 10 for both the company's financial strength and its profitability.

As of November, Wall Street sell-side analysts recommended one strong buy and one buy. They have also established an average target price of $23.61 per share.

Nexstar Media Group

The second company that makes the cut is Nexstar Media Group Inc. (NASDAQ:NXST), an Irving, Texas-based television broadcasting and digital media company.

As of Nov. 20, the price-earnings ratio without NRI was 8.81 and the PEG ratio was 0.36, which are more compelling when compared to the industry medians of 20.52 and 1.56.

The closing price on Nov. 20 was $104.57 per share, while net earnings without NRI were $11.87 per share for the trailing 12 months ended in September and the five-year Ebitda growth rate was 24.50%.

The share price has decreased by 4% over the past year for a market capitalization of $4.61 billion and a 52-week range of $43.37 to $133.25.

GuruFocus assigned a score of 3 out of 10 for the company's financial strength and a score of 8 out of 10 for its profitability.

As of November, Wall Street sell-side analysts recommend five strong buys and five buys for an average target price of $128.30 per share.

PennyMac Financial Services

The third company that makes the cut is PennyMac Financial Services Inc. (NYSE:PFSI), a Westlake Village, California-based provider of mortgage banking and investment management services.

As of Nov. 20, the price-earnings ratio without NRI was 3.3 versus the industry median of 10.92, while the PEG ratio traded at 0.09 compared to the industry median of 0.77.

The closing price on Nov. 20 was $56.12 per share, while net earnings without NRI was $17.03 per share for the trailing 12 months ended in September and the five-year Ebitda growth rate was 35.9%.

The share price increased by 66.3% over the past year for a market capitalization of $4.07 billion and a 52-week range of $13.14 to $67.77.

GuruFocus assigned a score of 2 out of 10 to the company's financial strength rating and of 8 out of 10 to its profitability.

As of November, Wall Street sell-side analysts recommend three buys, four holds and one underperform rating for an average target price of $75.29 per share.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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