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Alberto Abaterusso
Alberto Abaterusso
Articles (2616) 

A Trio of Stocks Trading Near the GuruFocus Value Line

These businesses could represent bargain opportunities

December 07, 2020 | About:

In search of bargain opportunities, value investors may want to consider the following three securities, as their share prices are trading near or below the intrinsic value estimated by the GuruFocus Value Line.

The GF Value is a unique intrinsic value calculation from GuruFocus that considers the combination of the following three components:

  • The stock's historical multiples such as the price-earnings (PE) ratio, the price-sales (PS) ratio, the price-book (PB) ratio and the price-to-free-cash-flow (PFCF) ratio
  • A GuruFocus adjustment factor based on the past returns and growth of the company's business
  • Estimations of future business performance

Synnex Corp

The first stock that meets the above criteria is Synnex Corp (NYSE:SNX), a Fremont, California-based provider of business process services in the Americas, Europe, Africa and Asia-Pacific.

Synnex's share price was $80.94 at close on Friday. Synnex's GF Value stands at $106.81. As a result, Synnex' Price-to-GF-Value ratio is 0.76. Therefore, this stock is modestly undervalued.

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The stock has a market capitalization of $4.17 billion after a 28.62% increase which took place over the past year. The 52-week range is $26.08 to $83.40, the price-earnings ratio is 8.55 (versus the industry median of 30.75) and the price-book ratio is 1.01 (versus the industry median of 3.55). Also, the price-sales ratio is 0.17 (versus the industry median of 2.83) and the price-to-free-cash-flow ratio is 2.40 (versus the industry median of 6.8).

The stock has a GuruFocus profitability rating of 8 out of 10.

Concerning future business performance, sell-side analysts on Wall Street forecast that after a 7.5% fall this year, earnings per share will grow again in 2021 by a 13.8% rate and over the next five years by an 8.85% rate per annum. As of December, the stock has three strong buy recommendation ratings, two buy recommendation ratings and two hold recommendation ratings for an average target price of $151.05 per share.

Taylor Morrison Home Corp

The second stock that meets the above criteria is Taylor Morrison Home Corp (NYSE:TMHC), a Scottsdale, Arizona-based builder of single-family and multi-family homes in the U.S.

Taylor Morrison Home Corp's share price was $25.58 at close on Friday, which, compared to Taylor Morrison Home Corp's GF Value of $24.50, gives a Price-to-GF-Value ratio of 1.04. Therefore, this stock is fairly priced.

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The stock has a market capitalization of $3.32 billion as a result of a 10.69% increase which was observed over the past year. The 52-week range is $6.39 to $28.47, the price-earnings ratio is 15.79 (versus the industry median of 11.12) and the price-book ratio is 0.97 (versus the industry median of 1.21). Furthemore, the price-sales ratio is 0.52 (compared to the industry median of 0.83) and the price-to-free-cash-flow ratio is 3.17 (compared to the industry median of 7.72).

The GuruFocus profitability rating is 7 out of 10.

With regard to future business performance, sell-side analysts on Wall Street predict that after a 15.3% decline this year, the earnings per share will increase again by 97% in 2021 and by 5.4% per annum over the next five years. As of December, the stock has one strong buy recommendation rating, one buy recommendation rating and 10 hold recommendation ratings for an average target price of $31.88 per share.

Dorian LPG Ltd

The third stock that meets the above criteria is Dorian LPG Ltd (NYSE:LPG), a Stamford, Connecticut-based liquefied petroleum gas midstream operator.

Dorian LPG's share price was trading at $11.51 at close on Friday. Dorian LPG's GF Value stands at $14.86. Thus, Dorian LPG's Price-to-GF-Value ratio is 0.77. Thus, this stock is modestly undervalued.

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The stock has a market capitalization of $585.65 million after a 21.7% declined which occurred over the past year. The 52-week range is $6.08 to $16.68, the price-earnings ratio is 7.83 (versus the industry median of 12.77) and the price-book ratio is 0.59 (compared to the industry median of 0.92). Furthermore, the price-sales ratio is 1.95 (compared to the industry median of 0.83) and the price-to-free-cash-flow ratio is 4.25 (versus the industry median of 10.1).

GuruFocus has assigned the stock a profitability rating of 6 out of 10.

Concerning future business performance, sell-side analysts on Wall Street estimate that after a 53.5% decline this year, the earnings per share will grow again by 78.6% in 2021 and by 15% per annum over the next five years. As of December, the stock has three buy recommendation ratings and five hold recommendation ratings for an average target price of $10.25 per share.

Disclosure: I have no position in any security 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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