4 Stocks Trading Near Their Peter Lynch Fair Values

These businesses could be opportunities for value investors

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Dec 10, 2021
Summary
  • Global Industrial Company, FTI Consulting Inc., PCSB Financial Corporation and Corcept Therapeutics Inc. are trading below or near their Peter Lynch fair values.
  • The metric is based on the idea that the fair price-earnings ratio for a growing company is on par with its growth rate.
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When searching for opportunities among growing companies, investors could be interested in the following stocks, since their share prices are trading near or below their Peter Lynch fair values.

The metric, which is based on the idea that the fair price-earnings ratio for a growing company is on par with its growth rate, is derived from the combination of the following components:

  • The stock's price-earnings to growth ratio.
  • The stock's five-year Ebitda growth rate.
  • The stock's earnings per share without non-recurring items for the trailing 12 months through the most recent quarter.

Global Industrial Company

The first stock that meets the criteria is Global Industrial Company (

GIC, Financial), a Port Washington, New York-based distributor of brand name and private label industrial equipment and supplies in the United States and Canada.

On Thursday, Global Industrial Company's shares closed at $40.88, below its Peter Lynch fair value of $41.99, for a price-to-Peter Lynch fair value ratio of about 0.97. This ranks better than 53% of the 55 companies that operate in the industrial distribution industry.

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The stock has a market capitalization of $1.55 billion after the share price recorded a 12.15% increase over the past year. The 52-week range is $32.39 to $45.97.

The stock has a median recommendation rating of overweight on Wall Street. The average target price is $51 per share.

FTI Consulting Inc.

The second stock that makes the cut is FTI Consulting Inc. (

FCN, Financial), a Washington, D.C.-based global provider of business advisory services for various private and public organizations worldwide.

On Thursday, FTI Consulting Inc.’s stock closed at $146.16, which is well below the Peter Lynch fair value per share of $167.65, yielding a price-to-Peter Lynch fair value ratio of approximately 0.87. This ranks better than 73% of the 364 companies that operate in the business services industry.

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The stock has a market capitalization of $5.01 billion following a 33% increase that occurred over the past year. The 52-week range is $105.07 to $154.83.

The stock has a median recommendation rating of buy on Wall Street and an average target price of $179.33 per share.

PCSB Financial Corporation

The third stock that qualifies is PCSB Financial Corporation (

PCSB, Financial), a Yorktown Heights, New York-based regional bank serving individuals and businesses in the Putnam, Southern Dutchess, Rockland and Westchester counties in New York.

On Thursday, PCSB Financial Corporation’s shares closed at $18.61, below its Peter Lynch fair value per share of $17.56, for a price-to-Peter Lynch fair value ratio of about 1.06. This ranks lower than 51% of the 838 companies that operate in the banks industry.

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The stock has a market capitalization of $288.87 million following a 16.60% increase over the past year. The 52-week range is $14.26 to $20.75.

The stock has a median recommendation rating of buy with an average target price of $21 per share on Wall Street.

Corcept Therapeutics Inc.

The fourth stock that qualifies is Corcept Therapeutics Inc. (

CORT, Financial), a Menlo Park, California-based biotechnology developer of treatments for U.S. patients affected by serious metabolic, oncologic and psychiatric disorders.

On Thursday, Corcept Therapeutics Inc.’s shares closed at $17.10, below its Peter Lynch fair value of $20.75, for a price-to-Peter Lynch fair value ratio of about 0.82. This ranks higher than 75% of the 65 companies that operate in the biotechnology industry.

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The stock has a market capitalization of $1.97 billion following a 32.46% increase over the past year. The 52-week range is $15.83 to $31.18.

The stock has a median recommendation rating of overweight with an average target price of $24.75 per share on Wall Street.

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
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