A Trio of Stocks Trading With a Margin of Safety

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

Summary
  • Devon Energy Corp, Under Armour Inc. and Regions Financial Corp could be bargains.
  • Their share prices are below their discounted cash flow values.
  • Wall Street sell-side analysts issued positive ratings for these companies.
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When screening the market for bargains, investors may want to consider 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 they expect higher share prices over the coming months.

Devon Energy Corp

The first stock investors could be interested in is Devon Energy Corp. (DVN, Financial), an Oklahoma City-based oil and gas producer.

The stock closed at $69.69 per share on Friday, which is below the intrinsic value of $76.91 calculated from the DCF model, yielding a margin safety of 16.10%.

The share price has risen by 148.10% over the past year, determining a market capitalization of $42.38 billion and a 52-week range of $24.05 to $69.75.

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GuruFocus has assigned a score of 6 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 $75.79 per share.

Under Armour Inc.

The second stock investors could be interested in is Under Armour Inc. (UAA, Financial), a Baltimore, Maryland-based developer, marketer and distributor of branded performance apparel, footwear and accessories for men, women and youth in North America and internationally.

The stock closed at $10.89 per share on Friday, which is below the intrinsic value of $15.56 calculated by the DCF model, yielding a margin safety of 31.43%.

The share price has dropped by 54.03% over the past year, determining a market capitalization of $4.80 billion and a 52-week range of $10.39 to $27.28.

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

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $20.12 per share.

Regions Financial Corp

The third stock investors could be interested in is Regions Financial Corp. (RF, Financial), a U.S. regional bank based in Birmingham, Alabama that focuses on banking and bank-related services for individual and corporate customers located across the South, Midwest and Texas regions of the U.S.

The stock closed at $21.12 per share on Friday, below the intrinsic value calculated from the DCF model of $38.35. The margin of safety stands at 45.48%.

The share price has fallen by 7.68% over the past year for a market capitalization of $19.50 billion and a 52-week range of $18.02 to $25.57.

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

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $25.38 per share.

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