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3 Stocks Trading Below Intrinsic Value

At current share prices, these securities grant interesting margins of safety

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Alberto Abaterusso
Dec 06, 2020
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Investors who are screening for bargains may be interested in the following stocks, as their share prices are trading below the intrinsic value calculated by GuruFocus' free cash flow-based discounted cash flow calculator.

These stocks also have optimistic recommendation ratings on Wall Street.

Computer Task Group

The first stock investors may be interested in is Computer Task Group Inc. (

CTG, Financial), a Buffalo, New York-based provider of information and technology services to several businesses in North America, Western Europe and India.

The stock traded at $6.92 per share at close on Friday, which is below the intrinsic value of $19.96 from the DCF model, yielding a margin of safety of 65.33%.

The share price has risen by 29.1% over the past year for a market capitalization of $105.03 million and a 52-week range of $2.86 to $7.3.

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GuruFocus has assigned a score of 7 out of 10 to the company's financial strength and of 6 out of 10 to its profitability.

On Wall Street, the stock has one recommendation rating of buy and a target price of $8.13 per share.

The company's top fund holder is Minerva Advisors LLC with 7.65% of shares outstanding, followed by Vanguard Group Inc. with 7.03% and Jim Simons' Renaissance Technologies with 6.84%.

Synalloy

The second stock investors may be interested in is Synalloy Corp. (

SYNL, Financial), a Richmond, Virginia-based manufacturer and seller of steel products and metal alloys as well as specialty chemicals, serving various industries, including oil and gas, industrials and health care, in the U.S.

The stock closed at $6.33 at on Friday, which is lower than the DCF valuation of $14.38, yielding a 55.98% margin of safety.

The share price has declined 45.74% over the past year, determining a market capitalization of $57.66 million and a 52-week range of $3.81 to $14.95.

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GuruFocus has assigned a score of 3 out of 10 to the company's financial strength and of 5 out of 10 to its profitability.

On Wall Street, the stock has one recommendation rating of buy and a target price of $11 per share.

Chuck Royce and Vanguard Group are the largest shareholders of the company, owning 10.24% and 4.49% of shares outstanding.

Lions Gate Entertainment

The third stock investors may be interested in is Lions Gate Entertainment Corp. (

LGF.A, Financial) (LGF.B, Financial), a Santa Monica, California-based entertainment company.

At close on Friday, the price of class A common stock was $10.17 per share and class B shares traded for $9.36.

Since the intrinsic value from the DCF model is approximately $27.73, then purchasing shares of Lions at current levels yields a margin of safety of about 63.32% on class A common stock and a margin of safety of about 66.25% on class B common stock.

The share price has risen about 6.5% to 7.1% over the past year, determining a market capitalization of approximately $2.13 billion and a 52-week range of $4.18 to $11.52 for class A common stock and of $3.87 to $10.85 for class B common stock.

Class A common stock:

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Class B common stock:

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GuruFocus has assigned a score of 4 out of 10 to the company's financial strength rating and of 5 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $11.15 per share.

Among the top shareholders of the company's class A common stock, MHR Fund Management LLC, Vanguard Group and Leucadia National are the three largest, owning 8.72%, 2.71% and 1.69% of shares outstanding.

Of those invested in class B common stock, Shapiro Capital Management Co. Inc., MHR and Vanguard Group have the largest positions, owning 8.85%, 6.84% and 4.51% of shares outstanding.

Disclosure: I have no positions in any securities mentioned.

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