5 Undervalued Companies With Profitable Business

Nexstar makes the list

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Dec 30, 2020
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According to the GuruFocus discounted cash flow calculator as of Dec. 30, the following companies have a high margin of safety and have grown their margins over a 10-year period.

Nexstar

Nexstar Media Group Inc.'s (NXST) net margin and operating margin have grown by 8.49% and 22.32%, respectively, per annum over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 14.56% margin of safety at $108.54 per share. The price-earnings ratio is 9.14. The share price has been as high as $133.25 and as low as $43.37 in the last 52 weeks; it is currently 18.54% below its 52-week high and 150.27% above its 52-week low.

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The U.S television station owner/operator has a market cap of $4.78 billion and an enterprise value of $12.31 billion.

The company's largest guru shareholder is Seth Klarman (Trades, Portfolio)'s The Baupost Group with 4.73% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.33% and Mario Gabelli (Trades, Portfolio) with 0.21%.

Turkcell Iletisim Hizmetleri

The net margin of Turkcell Iletisim Hizmetleri AS (TKC) has grown 14.44% per annum over the past decade. The operating margin has grown 17.56% per annum over the past decade.

According to the DCF calculator, the stock is undervalued with a 12.26% margin of safety at $5.36 per share. The price-earnings ratio is 9.49. The share price has been as high as $6.36 and as low as $4.36 in the last 52 weeks; it is currently 15.72% below its 52-week high and 22.94% above its 52-week low.

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The Turkish mobile telephone services provider has a market cap of $4.68 billion and an enterprise value of $5.84 billion.

With 0.01% of outstanding shares, Caxton Associates (Trades, Portfolio) is the company's largest guru shareholder.

Simpson Manufacturing

Simpson Manufacturing Co. Inc. (SSD) has grown its net margin and operating margin by 8.50% and 13.91%, respectively, per year over the past decade.

According to the DCF calculator, the stock is undervalued with a 21% margin of safety at $93.05 per share. The price-earnings ratio is 22.05. The share price has been as high as $104.34 and as low as $47.02 in the last 52 weeks; it is currently 10.82% below its 52-week high and 97.89% above its 52-week low.

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The company, which manufactures wood construction products, has a market cap of $4.04 billion and an enterprise value of $3.85 billion.

The company's largest guru shareholder is John Rogers (Trades, Portfolio) with 1.34% of outstanding shares followed by Chuck Royce (Trades, Portfolio) with 1% and Ken Fisher (Trades, Portfolio) with 0.37%.

Grand Canyon Education

The net margin of Grand Canyon Education Inc. (LOPE) has grown 16.51% per annum over the past decade. The operating margin has grown 26.60% annually over the same period.

According to the DCF calculator, the stock is undervalued with a 35.80% margin of safety at $94.86 per share. The price-earnings ratio is 18.28. The share price has been as high as $106.14 and as low as $57.89 in the last 52 weeks; it is currently 10.63% below its 52-week high and 63.86% above its 52-week low.

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The U.S for-profit educational company has a market cap of $34.06 billion and an enterprise value of $32.01 billion.

The company's largest guru shareholder is Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.74% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.13% and Ray Dalio (Trades, Portfolio)'s Bridgewater Associates with 0.05%.

Micro Focus International

Micro Focus International PLC's (MFGP) net margin and operating margin have grown 23.07% and 35.06%, respectively, per year over the past 10 years.

The price-book ratio is 0.37. The share price has been as high as $14.77 and as low as $2.78 in the last 52 weeks; it is currently 61.21% below its 52-week high and 106.12% above its 52-week low.

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The U.K.-based software solutions provider has a market cap of $1.94 billion and an enterprise value of $6.62 billion.

With 10.37% of outstanding shares, Dodge & Cox is the company's largest guru shareholder, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.22% and Sarah Ketterer (Trades, Portfolio) with 0.08%.

Disclosure: I do not own any stocks mentioned.

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