5 Undervalued Stocks With Profitable Business

Domino's Pizza makes the list

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Jun 04, 2021
Summary
  • PerkinElmer has a 64% margin of safety
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According to the GuruFocus discounted cash flow calculator as of June 4, the following companies have a high margin of safety and have grown their margins over a 10-year period.

PerkinElmer

PerkinElmer Inc.'s (PKI) net margin and operating margin have grown by 8.23% and 12.36% per annum, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 63.94% margin of safety at $145.07 per share. The price-earnings ratio is 15.19. The share price has been as high as $162.70 and as low as $93.23 in the last 52 weeks; it is currently 10.84% below its 52-week high and 55.60% above its 52-week low.

The company, which provides instruments and software solutions to the pharmaceutical and general industrial markets, has a market cap of $16.26 billion and an enterprise value of $18.04 billion.

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The company's largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 1.51% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.37% and Jim Simons (Trades, Portfolio) ’ Renaissance Technologies with 0.29%.

Domino's Pizza

The net margin of Domino's Pizza Inc. (DPZ) has grown 8.69% per annum over the past decade. The operating margin has grown 17.40% per annum over the same period.

According to the DCF calculator, the stock is undervalued with a 17.81% margin of safety at $426.87 per share. The price-earnings ratio is 34.62. The share price has been as high as $319.71 and as low as $447.50 in the last 52 weeks; it is currently 4.61% below its 52-week high and 33.52% above its 52-week low.

The restaurant operator and franchisor has a market cap of $16.57 billion and an enterprise value of $20.66 billion.

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With 5.25% of outstanding shares, Bill Ackman (Trades, Portfolio) is the company's largest guru shareholder, followed by Simons’ firm with 2.41% and Ken Fisher (Trades, Portfolio) with 0.98%.

Snap-on

Snap-on Inc. (SNA) has grown its net margin and operating margin by 13.63% and 21.67%, respectively, per year over the past decade.

According to the DCF calculator, the stock is undervalued with a 23.42% margin of safety at $254.62 per share. The price-earnings ratio is 20.45. The share price has been as high as $259 and as low as $127.39 in the last 52 weeks; it is currently 2.07% below its 52-week high and 99.87% above its 52-week low.

The company, which provides premium tools and software for professional technicians, has a market cap of $13.77 billion and an enterprise value of $14.37 billion.

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The company's largest guru shareholder is John Rogers (Trades, Portfolio) with 1.92%% of outstanding shares, followed by T Rowe Price Equity Income Fund (Trades, Portfolio) with 1.10% and Pioneer Investments (Trades, Portfolio) with 0.18%.

Check Point Software Technologies

The net margin of Check Point Software Technologies Ltd. (CHKP) has grown 43.07% per annum over the past decade. The operating margin has grown 50.66% annually over the same period.

According to the DCF calculator, the stock is undervalued with a 9.84% margin of safety at $116.98 per share. The price-earnings ratio is 19.24. The share price has been as high as $139.26 and as low as $103 in the last 52 weeks; it is currently 16% below its 52-week high and 13.10% above its 52-week low.

The company, which provides solutions for network, endpoint, cloud and mobile security in addition to security management, has a market cap of $15.83 billion and an enterprise value of $13.95 billion.

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The company's largest guru shareholder is Rogers with 0.36% of outstanding shares, followed by Simons’ firm with 0.23%, Diamond Hill Capital (Trades, Portfolio) with 0.23% and Pioneer Investments (Trades, Portfolio) with 0.10%.

VeriSign

VeriSign Inc. 's (VRSN) net margin and operating margin have grown 38.92% and 58.66%, respectively, per year over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 5.41% margin of safety at $219.92 per share. The price-earnings ratio is 39.84. The share price has been as high as $226 and as low as $184 in the last 52 weeks; it is currently 2.77% below its 52-week high and 19.13% above its 52-week low.

The company, which operates root servers that are used to route Internet traffic, has a market cap of $24.77 billion and an enterprise value of $25.38.

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With 11.38% of outstanding shares, Warren Buffett (Trades, Portfolio) ’s Berkshire Hathaway is the company's largest guru shareholder, followed by Andreas Halvorsen (Trades, Portfolio) with 0.61% and Ron Baron (Trades, Portfolio) with 0.59%.

Disclosure: I do not own any stocks mentioned.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure