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Tiziano Frateschi
Tiziano Frateschi
Articles (2703)  | Author's Website |

5 Undervalued Companies With Profitable Businesses

Winmark makes the list

According to the GuruFocus discounted cash flow calculator as of Nov. 25, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.

Winmark

Winmark Corp.'s (NASDAQ:WINA) net margin and operating margin have grown 32.76% and 53.74% per annum, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 11.60% margin of safety at $204 per share. The price-earnings ratio is 23.39. The share price has been as high as $215 and as low as $115 in the last 52 weeks; it is currently 16% below its 52-week high and 56% above its 52-week low.

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The company, which operates in franchising and leasing, has a market cap of $674 million and an enterprise value of $686 million.

The company's largest guru shareholder is Jim Simons (Trades, Portfolio)' Renaissance Technologies with 5.11% of outstanding shares.

Transportadora de Gas del Sur

The net margin of Transportadora de Gas del Sur SA (NYSE:TGS) has grown 8.55% per annum over the past decade. The operating margin has grown 25.96% per annum over the past decade.

According to the DCF calculator, the stock is undervalued with a 53% margin of safety at $5.57 per share. The price-earnings ratio is 11.53. The share price has been as high as $7.69 and as low as $3.72 in the last 52 weeks; it is currently 27.31% below its 52-week high and 50.27% above its 52-week low.

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The natural gas transporter in Latin America has a market cap of $844 million and an enterprise value of $1.11 billion.

The company's largest guru shareholder is Howard Marks (Trades, Portfolio)' Oaktree Capital with 1.32% of outstanding shares.

Ebix

Ebix Inc. (NASDAQ:EBIX) has grown its net margin and operating margin by 29.81% and 35.13% per year over the past decade.

According to the DCF calculator, the stock is undervalued with a 25.59% margin of safety at $35.99 per share. The price-earnings ratio is 11.72. The share price has been as high as $42.61 and as low as $8.75 in the last 52 weeks; it is currently 14.60% below its 52-week high and 315.89% above its 52-week low.

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The company, which provides enterprise cloud e-commerce solutions, has a market cap of $1.13 billion and an enterprise value of $1.79 billion.

The company's largest guru shareholder is Chuck Royce (Trades, Portfolio) with 1.29% of outstanding shares, followed by Hotchkis & Wiley with 0.73%.

Methode Electronics

The net margin of Methode Electronics Inc. (NYSE:MEI) has grown 9.81% per annum over the past decade. The operating margin has grown 11.85% annually over the same 10-year period.

According to the DCF calculator, the stock is undervalued with a 58.14% margin of safety at $36.35 per share. The price-earnings ratio is 11.94. The share price has been as high as $41.7 and as low as $21.76 in the last 52 weeks; it is currently 13.21% below its 52-week high and 66.31% above its 52-week low.

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The company, which manufactures component and subsystem devices, has a market cap of $1.36 billion and an enterprise value of $1.52 billion.

The company's largest guru shareholder is John Rogers (Trades, Portfolio) with 2.46% of outstanding shares, followed by Royce with 1.50% and Hotchkis & Wiley with 0.47%.

Walker & Dunlop

Walker & Dunlop Inc.'s (NYSE:WD) net margin and operating margin have grown 18.67% and 30.89% annually over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 51.84% margin of safety at $83.2 per share. The price-earnings ratio is 12.93. The share price has been as high as $84.52 and as low as $24.55 in the last 52 weeks; it is currently 2.06% below its 52-week high and 237% above its 52-week low.

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The commercial real estate finance company has a market cap of $2.60 billion and an enterprise value of $5.93 billion.

With 0.98% of outstanding shares, Jeremy Grantham (Trades, Portfolio) is the company's largest guru shareholder.

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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