4 Stocks Trading Below the Peter Lynch Earnings Line

These companies could be undervalued

Summary
  • MKS Instruments Inc., Stifel Financial Corp, Old Republic International Corp and Huntsman Corporation are trading under their respective Peter Lynch earnings lines.
  • These stocks may be value opportunities.
  • Wall Street also likes these stocks.
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Value investors could be interested in the following stocks, since their share prices are trading below their respective Peter Lynch earnings lines. This indicates they could be undervalued by the market. On Wall Street, these stocks have also received positive ratings from sell-side analysts.

MKS Instruments Inc.

The first stock investors could be interested in is MKS Instruments Inc. (MKSI, Financial), an Andover, Massachusetts-based provider of production process measurement, analyzing and controlling instruments and systems to the manufacturing industry.

The chart below shows the share price ($144.98 at close on Feb. 11) is currently trading below the intrinsic value estimate of $148.50 calculated by the Peter Lynch earnings line.

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The stock has fallen 13.4% over the past year through Friday for a market capitalization of $8.04 billion and a 52-week range of $138.70 to $199.44.

The stock has a median recommendation rating of buy on Wall Street and an average target price of $240.70.

GuruFocus has assigned a score of 7 out of 10 to the company's financial strength and 9 out of 10 to its profitability.

Vanguard Group Inc., BlackRock Inc. and Capital International Investors are among the company's largest shareholders. Vanguard holds 10.48% of its shares outstanding, BlackRock holds 9.12% and Capital International Investors has 8.16%.

Stifel Financial Corp

The second stock investors could be interested in is Stifel Financial Corp. (SF, Financial), a Saint Louis, Missouri-based financial services firm providing retail and institutional wealth management. It also offers investment banking services to individuals, corporations and public entities in North America, the United Kingdom and the rest of Europe.

The chart below shows the share price ($78.41 as of Feb. 11) is currently trading below the Peter Lynch earnings line's intrinsic value estimate of $99.90.

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The stock has gained 34% over the past year through Friday, determining a market capitalization of $8.2 billion and a 52-week range of $56.81 to $83.28.

Wall Street sell-side analysts have issued a median recommendation rating of overweight for this stock with an average target price of $97.

GuruFocus has assigned a score of 3 out of 10 to the company's financial strength and 6 out of 10 to its profitability.

BlackRock Inc., Vanguard Group Inc. and Capital Research Global Investors are among the company's largest shareholders. BlackRock Inc. holds 12.10% of its shares outstanding, Vanguard Group holds 9.13% and Capital Research Global Investors has 5.83%.

Old Republic International Corp

The third stock investors could be interested in is Old Republic International Corp. (ORI, Financial), a Chicago-based insurance company.

The chart below shows the share price ($26.44 at close on Feb. 11) is trading below the Peter Lynch earnings line's intrinsic value estimate of $76.20.

The stock has risen by 33.5% over the past year through Friday for a market capitalization of $8.12 billion and a 52-week range of $19.18 to $26.81.

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The stock has a median recommendation rating of overweight on Wall Street with an average target price of $30 per share.

GuruFocus awarded a 5 out of 10 to both the company's financial strength and its profitability.

BlackRock is the largest shareholder of the company with 9.89% of the total outstanding shares. Vanguard and State Street Corp follow with 8.99% and 7.07%, respectively.

Huntsman Corporation

The fourth stock investors could be interested in is Huntsman Corporation (HUN, Financial), a Woodlands, Texas-based manufacturer and seller of differentiated organic chemical products worldwide.

The chart below shows the share price ($36.83 at close on Feb. 11) is trading below the Peter Lynch earnings line's intrinsic value estimate of $54.11.

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The stock has climbed 29.14% over the past year through Friday for a market capitalization of $8.03 billion and a 52-week range of $24.09 to $38.51.

On Wall Street, the stock has three strong buys and seven hold recommendation ratings. The average target price is $42.10 per share.

GuruFocus awarded a 5 out of 10 to the company's financial strength and a 6 out of 10 to its profitability.

Vanguard Group is the largest shareholder of the company with 9.61% of the total outstanding shares. Starboard Value LP and BlackRock follow with 8.63% and 5.79%, respectively.

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