In search of value opportunities, investors may want to consider the following stocks since their share prices are trading at a discount to the intrinsic value calculated by GuruFocus' earnings-based discounted cash flow calculator.
Wall Street sell-side analysts have also issued positive ratings for these companies, increasing the likelihood their stocks will be good performers in the future.
Verizon Communications
The first stock that makes the cut is Verizon Communications Inc. (VZ, Financial), a New York-based telecommunication services company.
The stock closed at $61.35 per share on Monday, which is much lower than the intrinsic value of $125.55 from the discounted earnings model, for a margin of safety of 51.14%.
The share price increased by only 0.56% over the past year for a market capitalization of $253.87 billion and a 52-week range of $48.84 to $62.22.
GuruFocus has assigned a score of 4 out of 10 to the company's financial strength and of 7 out of 10 to its profitability.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $62.53 per share.
Vanguard Group Inc. is the company's top institutional shareholder with 7.95% of shares outstanding, which is followed by BlackRock Inc. with 7.27% of shares outstanding and State Street Corp. with 3.99% of shares outstanding.
Toronto-Dominion Bank
The second stock that qualifies is The Toronto-Dominion Bank (TD, Financial), a Canadian provider of various banking products and services to households and businesses.
The stock closed at $55.49 per share on Monday, which stands lower than the intrinsic value of $69.19 from the discounted earnings model, yielding a 19.8% margin of safety.
The share price has increased by only 0.65% over the past year, determining a market capitalization of $100.94 billion and a 52-week range of $33.74 to $57.5.
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.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $56 per share.
Royal Bank of Canada is the company's largest shareholder with 8.47% of shares outstanding. Bank of Montreal has 4.15% of shares outstanding, while Vanguard Group holds 3%.
Applied Materials
The third stock that meets the criteria is Applied Materials Inc. (AMAT, Financial), a Santa Clara, California-based supplier of manufacturing equipment, services and software to semiconductor producers.
Shares were trading at $89.14 at close on Monday, below the intrinsic value of $111.60 from the discounted earnings model, for a 19.81% margin of safety.
The share price increased by 57.49% over the past year, determining a market capitalization of $81.41 billion and a 52-week range of $36.64 to $89.46.
GuruFocus has assigned a score of 7 out of 10 to the company's financial strength and of 9 out of 10 to its profitability.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $84.26 per share.
BlackRock dominates the group of the top fund holders of the company with 8.56% of shares outstanding, followed by Vanguard Group with 8.08% and T. Rowe Price Associates Inc. with 5.1% of shares outstanding.
Disclosure: I have no positions in any securities mentioned.
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