Investors who are in search of value opportunities may be interested in the following stocks since their prices are trading at a discount to the intrinsic value calculated by GuruFocus' earnings-based discounted cash flow calculator.
These securities also hold optimistic recommendation ratings among sell-side analysts on Wall Street.
D.R. Horton
The first stock that meets the criteria is D.R. Horton Inc. (DHI, Financial), an Arlington, Texas-based residential construction company.
The stock traded at $83.63 per share on Friday, which is lower than the intrinsic value of $210.67 from the discounted earnings model, for a margin of safety of 60.30%.
The share price has risen by nearly 183% over the past year for a market capitalization of $30.42 billion and a 52-week range of $28.15 to $87.24.
GuruFocus has assigned a score of 6 out of 10 to the company's financial strength and 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 $95.48 per share.
BlackRock is the company's top fund holder with 9.89% of shares outstanding. It is followed by Vanguard Group with 9.82% of shares outstanding and FMR with 4.74%.
Celanese
The second stock that qualifies is Celanese Corp. (CE, Financial), an Irving, Texas-based manufacturer of high-performance engineered polymers.
The stock closed at $147.64 per share on Friday, which stands lower than the intrinsic value of $395.90 from the DCF model, yielding a 62.71% margin of safety.
The share price increased by 137.4% over the past year, determining a market capitalization of $16.86 billion and a 52-week range of $60.33 to $152.60.
GuruFocus has assigned a score of 5 out of 10 to the company's financial strength and 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 $145 per share.
Vanguard Group is the company's top fund holder with 11.99% of shares outstanding. Next is Wellington Management Group with 8.89% of shares outstanding, followed by Dodge & Cox with 8.23%.
Anglogold Ashanti
The third stock that makes the cut is Anglogold Ashanti Ltd. (AU, Financial), a South African gold miner with mineral resources located in South and Continental Africa, the Americas and Oceania.
The stock closed at $21.96 per share on Friday, which is below the intrinsic value of $24.19 from the DCF model, yielding a 9.22% margin of safety.
The share price has climbed 42.60% over the past year, determining a market capitalization of $9.15 billion and a 52-week range of $14.80 to $38.50.
GuruFocus has assigned a score of 6 out of 10 to both the company's financial strength and its profitability.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $26.99 per share.
Van Eck Associates dominates the group of top fund holders of the company, owning 6.35% of shares outstanding. BlackRock is second with 2.47% of shares outstanding, followed by Capital International Investors with 1.96%.
Disclosure: I have no positions in any securities mentioned.
Read more here:
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- 3 Magic Formula Stocks for the Value Investor
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