3 Stocks Trading Below the Peter Lynch Earnings Line

These companies could be value opportunities

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Alberto Abaterusso
Apr 15, 2021
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Value investors may want to have a look at the following three stocks, since their share prices are trading below their respective Peter Lynch earnings lines. This suggests they could be undervalued.

Wall Street sell-side analysts have also issued positive ratings for these businesses.

Banco Latinoamericano de Comercio Exterior SA

The first stock investors may want to have a look at is Banco Latinoamericano de Comercio Exterior SA (

BLX, Financial), a Panamanian regional bank primarily focusing on the financing of foreign trade in Latin America and the Caribbean.

The chart illustrates that the share price ($14.93 at close on April 14) is currently trading below the Peter Lynch earnings line ($24.15).

The stock has risen approximately 43.42% over the past year through Wednesday for a market capitalization of $592.39 million and a 52-week range of $8.47 to $16.92.

The stock has one recommendation rating of buy with a target price of $18, which mirrors a 20.6% upside from Wednesday's closing price. Earnings per share are also projected to rise 8.5% every year (on average) over the next five years.

GuruFocus has assigned a score of 2 out of 10 to the company's financial strength and 4 out of 10 to its profitability.

LSV Asset Management dominates the group of top fund holders of the company, holding 3.07% of shares outstanding. It is followed by Beddow Capital Management Inc with 1.06% and Lee Danner & Bass Inc with 1.04%.

Standard Motor Products Inc

The second stock investors may want to have a look at is Standard Motor Products Inc (

SMP, Financial), a Long Island, New York-based manufacturer and supplier of spare parts for motor vehicles.

The chart shows that the share price ($42.64 per share as of April 14) is currently standing below the Peter Lynch earnings line ($52.95).

The stock has grown 7.6% over the past year through Wednesday, determining a market capitalization of $953.32 million and a 52-week range of $33.94 to $55.29.

Wall Street sell-side analysts expect that the share price will significantly increase within 52 weeks, reaching a target price of $48.33 per share, which represents a 13.34% upside from Wednesday's closing price. The stock has a median recommendation rating of buy. Analysts forecast that the trailing 12-month earnings per share will increase by 7% every year (on average) over the next five years.

GuruFocus has assigned a score of 7 out of 10 to the company's financial strength and 8 out of 10 to its profitability.

BlackRock and Vanguard Group are the largest fund holders of the company, owning 14.27% and 5.91% of shares outstanding, respectively.

Ebix Inc

The third stock investors may want to have a look at is Ebix Inc (

EBIX, Financial), a Johns Creek, Georgia-based provider of on-demand software and e-commerce services and solutions to several industries in the U.S. and internationally.

The chart exhibits that the share price ($29.90 per share at close on April 14) is currently trading below the Peter Lynch earnings line ($46.20).

The stock has gained more than 80% over the past year through Wednesday, which determined a market capitalization of $925.78 million and a 52-week range of $12.58 to $64.14.

Wall Street thinks this stock will advance strongly within 12 months as sell-side analysts have established an average target price of $54.75, reflecting an 83.1% upside from Wednesday's closing price. The stock has a median recommendation rating of buy. The trailing 12-month earnings per share is forecasted to increase by an average yearly growth rate of 10% over the next five years.

GuruFocus has assigned a score of 4 out of 10 to the financial strength and of 9 out of 10 to the profitability of the company.

BlackRock is the top fund holder with 11.97% of shares outstanding. It is followed by Vanguard Group with 8.70% and FMR LLC with 5.40%.

Disclosure: I have no positions in any securities mentioned.

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I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands. You can follow me on Twitter at https://twitter.com/AAbaterusso