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3 Stocks Trading With a Margin of Safety

Based on the discounted cash flow model, these stocks could be underestimated by the market

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Alberto Abaterusso
Sep 26, 2021

Summary

  • Synchrony Financial, Westlake Chemical and Assurant could be bargains.
  • Their share prices are below the discounted cash flow value.
  • Wall Street sell-side analysts issued positive ratings for these companies.
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When looking for bargains, investors could be interested in the following stocks since their share prices are trading below the intrinsic value calculated by GuruFocus' free cash flow-based discounted cash flow calculator.

Additionally, Wall Street has issued positive recommendation ratings for these companies, which means that they expect higher share prices over the coming months.

Synchrony Financial

The first stock investors could be interested in is Synchrony Financial (

SYF, Financial), a Stamford, Connecticut-based credit services company focused on financial products and services for U.S. consumers.

The stock traded at $50.23 per share at close on Friday, which is below the intrinsic value of $172.67 calculated from the DCF model, yielding a margin safety of 70.91%.

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The share price has risen by 95% over the past year, determining a market capitalization of $28.62 billion and a 52-week range of $24.47 to $52.14.

GuruFocus has assigned a score of 3 out of 10 to the company's financial strength and a 5 out of 10 rating to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $57.21 per share.

Westlake Chemical

The second stock investors could be interested in is Westlake Chemical Corp. (

WLK, Financial), a Houston-based specialty chemicals company.

The stock traded at $87.81 per share at close on Friday, which is below the intrinsic value of $351.60 calculated from the DCF model, yielding a margin safety of 75.03%.

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The share price has risen by 40.3% over the past year, determining a market capitalization of $11.25 billion and a 52-week range of $59.745 to $106.47.

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

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $107.94 per share.

Assurant

The third stock investors could be interested in is Assurant Inc. (

AIZ, Financial), a New York-based specialty insurance company focusing on lifestyle and housing solutions for consumers in North America, Latin America and internationally.

The stock traded at $161.16 per share at close on Friday, below the intrinsic value calculated from the DCF model of $414.49. The margin of safety stands at 61.12%.

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The share price has climbed 34.2% over the past year for a market capitalization of $9.48 billion and a 52-week range of $116.46 to $172.22.

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

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $191 per share.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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