Value investors may want to consider the three stocks listed below, as their share prices are trading below their respective Peter Lynch earnings lines, indicating they could be undervalued. Sell-side analysts on Wall Street have also issued positive ratings for these stocks.
State Street Corporation
The first stock to consider is State Street Corporation (STT, Financial), a Boston, Massachusetts-based asset management firm providing various financial products and services to institutional investors operating on global markets.
The below chart exhibits that the share price ($75.16 at close on Feb. 17) is currently trading below the Peter Lynch earnings line ($94.80 as of Dec. 28, 2020).
The stock price has lost 4.6% over the past year through Wednesday, for a market capitalization of $26.54 billion and a 52-week range of $42.10 to $81.08.
Wall Street sell-side analysts estimate that the share price will increase over the next 52 weeks, as the target share price of $87.50 marks a 16.4% upside from Wednesday's closing price. The stock has a median recommendation rating between buy and hold. Earnings per share (EPS) are also expected to rise, increasing 1.8% to $6.82 this year, 15.80% to $7.90 in 2022 and 15% per annum (on average) over the next five years.
GuruFocus has assigned a score of 3 out of 10 to the financial strength and 5 out of 10 to the profitability of the company.
Vanguard Group Inc dominates the group of top fund holders of the company, holding 9.37% of shares outstanding. It is followed by BlackRock Inc. and Dodge & Cox with , 6.99% and 5.76%, respectively.
Entergy Corp
The second stock to consider is Entergy Corp (ETR, Financial), a New Orleans, Louisiana-based producer and distributor of power in several regions of the U.S.
The below chart illustrates that the stock price ($93.19 per share as of Feb. 17) is currently standing below the Peter Lynch earnings line ($103.35 as of Sept. 28, 2020).
The stock price has decreased by 30% over the past year through Wednesday, determining a market capitalization of $18.66 billion and a 52-week range of $75.19 to $135.55.
Wall Street sell-side analysts predict that the share price will bounce back strongly within 12 months, hitting a target price of $113.19 per share, which reflects more than 20% upside from Wednesday's closing price. The stock has a median recommendation rating of buy. Analysts predict that the trailing 12-month EPS will rise 4.6% year over year up to $5.89 in 2021 and gain an average of 5.2% every year over the next five years.
GuruFocus has assigned a score of 3 out of 10 to the financial strength and 5 out of 10 to the profitability of the company.
Vanguard Group Inc is the largest top fund holder of the company, possessing 11.45% of shares outstanding. It is followed by BlackRock Inc. with 7.22% of shares outstanding and State Street Corp with 5.06% of shares outstanding.
DISH Network Corp
The third stock to consider is DISH Network Corp (DISH, Financial), an Englewood, Colorado-based provider of pay-tv services in the U.S.
The below chart shows that the stock price ($32.50 per share at close on Feb. 17) is currently trading below the Peter Lynch earnings line ($36.90 as of Sept. 28, 2020).
The stock price has fallen 21.21% over the past year through Wednesday, which determined a market capitalization of $17.10 billion and a 52-week range of $17.09 to $42.62.
Wall Street thinks that this stock will rebound strongly within a year as sell-side analysts have established an average target price of $40.42, which mirrors a 30.5% upside from Wednesday's closing price. The stock has a median recommendation falling in between a buy and a hold rating. The trailing 12-month EPS is projected to hit $2.69 in 2021, up 3.5% from $2.60 in 2020.
GuruFocus has assigned a score of 4 out of 10 to the financial strength and of 7 out of 10 to the profitability of the company.
Dodge & Cox Inc leads the group of the company's top fund holders, owning 6.56% of shares outstanding. It is followed by Vanguard Group Inc with 4.91% and BlackRock Inc. with 3.06%.
Disclosure: I have no position in any security mentioned.
Read more here:
- A Trio of Stocks Trading Below Their Earnings Power Values
- A Trio of High Return on Equity Stock Picks to Consider
- 3 Net-Net Working Capital Stocks
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