When looking for bargain opportunities, value investors may want to consider the following three stocks, since their trailing 12-month and forward price-earnings to growth (PEG) ratios are trading both below the S&P 500's historical mean of 1.5 as of April 22. Thus, they could be undervalued by the market.
The PEG ratio is calculated as the price-earnings ratio without non-recurring items (NRI) divided by the five-year Ebitda growth rate. The forward PEG ratio is calculated as the price-earnings ratio without non-recurring items (NRI) divided by the predicted future five-year earnings per share growth rate.
Wall Street sell-side analysts have also issued optimistic recommendation ratings for these stocks.
Micron Technology Inc
The first company that qualifies is Micron Technology Inc (MU, Financial), a Boise, Idaho-based semiconductors manufacturer.
As of April 22, Micron Technology has a share price of $84.71, a price-earnings ratio of 30.04, a past five-year Ebitda growth rate of 21.90% and an estimated future five-year earnings growth rate of 60.47%. Thus, the trailing 12-month PEG ratio is 1.37 and the forward PEG ratio is 0.50.
Thanks to a 91.83% increase over the past year, the market capitalization stands at $95 billion and the 52-week range is $42.25 to $96.96.
GuruFocus assigned a score of 7 out of 10 for the company's financial strength and of 8 out of 10 for its profitability.
On Wall Street, as of April, the stock has a median recommendation rating of buy with an average target price of $118.93 per share.
Aptiv PLC
The second company that meets the criteria is Aptiv PLC (APTV, Financial), an Irish global manufacturer and distributor of auto parts.
As of April 22, Aptiv PLC has a share price of $138.93, a price-earnings ratio of 20.43, a past five-year Ebitda growth rate of 13.90% and an estimated future five-year earnings per share growth rate of 42.87%. Therefore, the trailing 12-month PEG ratio is 1.47 and the forward PEG ratio is 0.48.
Due to a 121.44% increase over the past year, the market capitalization is $37.58 billion and the 52-week range is $45.70 to $160.14.
GuruFocus assigned a score of 5 out of 10 for the company's financial strength and 8 out of 10 for its profitability.
On Wall Street, as of April, the stock has a median recommendation rating of overweight with an average target price of $157.74 per share.
Logitech International SA
The third company that makes the cut is Logitech International SA (LOGI, Financial), a Lausanne, Switzerland-based designer of products for connecting through computing, gaming, music, video and other global digital platforms.
As of April 22, Logitech International SA has a share price of $114.26, a price-earnings ratio of 20.93, a past five-year Ebitda growth rate of 14% and an estimated future five-year earnings per share growth rate of 30.04%. Thus, the trailing 12-month PEG ratio is 1.49 and the forward PEG ratio is 0.70.
Following a 140.5% increase over the past year, the market capitalization is $19.36 billion and the 52-week range is $43.50 to $120.24.
GuruFocus assigned a score of 7 out of 10 to the company's financial strength rating and 8 out of 10 to its profitability.
On Wall Street, as of April, the stock has a median recommendation rating of overweight with an average target price of $123.82 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Stocks Growing Earnings Faster than Sales
- A Trio of High-Return, Non-Cyclical Stocks for the Value Investor
- 3 High Forward Rate of Return Stock Picks
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
