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3 Stocks Trading Below Intrinsic Value

These securities trade with margins of safety based on the discounted cash flow model

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Alberto Abaterusso
Feb 19, 2021
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If in search of bargains, investors may want to have a look at 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 amid Wall Street sell-side analysts.

Royal Bank of Canada

The first stock investors may be interested in is Royal Bank of Canada (

RY, Financial), a Toronto, Canada-based bank providing diversified financial services to consumers, households and businesses internationally.

The stock traded at $86.07 per share at close on Thursday, which is below the intrinsic value of $739.45 calculated from the DCF model, yielding a margin of safety of 88.36%.

The share price has risen by 5.74% over the past year for a market capitalization of $122.24 billion and a 52-week range of $49.55 to $86.14.

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GuruFocus has assigned a score of 4 out of 10 to the company's financial strength rating and of 6 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $94 per share.

Bank of Montreal /Can/, Vanguard Group Inc and TD Asset Management Inc are among the largest top fund holders of the company, owning 4.48%, 3.02% and 2.13% of shares outstanding, respectively.

The Toronto-Dominion Bank

The second stock investors may be interested in is The Toronto-Dominion Bank (

TD, Financial), a Canadian provider of various banking products and services to households and businesses.

The stock closed at $59.50 per share on Thursday, which is lower than the DCF valuation of $989.77, yielding a 93.99% margin of safety.

The share price has risen by nearly 4% over the past year, determining a market capitalization of $107.92 billion and a 52-week range of $33.74 to $59.97.

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GuruFocus has assigned a score of 3 out of 10 to the company's financial strength rating and of 6 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of hold and an average target price of $61 per share.

Royal Bank of Canada is the largest shareholder of the company with 7.96% of shares outstanding. It is followed by Bank of Montreal /Can/ with 3.78% of shares outstanding and Vanguard Group Inc with 2.99% of shares outstanding.

Universal Health Services Inc

The third stock investors may be interested in is Universal Health Services Inc (

UHS, Financial), a King of Prussia, Pennsylvania-based owner and operator of more than 400 medical care facilities in the U.S., the United Kingdom and Puerto Rico.

The stock price was $127.43 per share at close on Thursday, which is below the intrinsic value calculated from the DCF model of $230.45. The margin of safety stands at 44.70%.

The share price has declined by nearly 9% over the past year, determining a market capitalization of $10.83 billion and a 52-week range of $65.20 to $143.84.

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GuruFocus has assigned a score of 5 out of 10 to the company's financial strength rating and of 8 out of 10 to its profitability rating.

On Wall Street, the stock has a recommendation rating of overweight and an average target price of $146.36 per share.

Amid the top fund holders of the company, Vanguard Group Inc is the largest with 9.77% of shares outstanding. BlackRock Inc. and Wellington Management Group LLP are the second and the third in the ranking with 6.12% and 4.30%, respectively.

Disclosure: I have no positions in any securities mentioned.

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