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4 Potential Value Opportunities

The DCF model shows these stocks could have good value

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May 20, 2022
Summary
  • Federal Signal, Advanced Micro Devices, RLX Technology and CNH Industrial are trading at a discount to their DCF values.
  • Wall Street is also positive about these stocks.
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When seeking value opportunities, investors could be interested in the following stocks since their prices are trading at a discount to the intrinsic value calculated by GuruFocus' earnings-based discounted cash flow calculator.

Furthermore, sell-side analysts on Wall Street have issued positive recommendation ratings for these stocks, indicating they expect share prices to rise.

Federal Signal

The first stock that meets the criteria is Federal Signal Corp. (

FSS, Financial), an Oak Brook, Illinois-based manufacturer and supplier of safety and security products and environmental solutions.

The stock was trading around $33.50 per share at close on Thursday, below the intrinsic value estimate of $45.81 from the DCF model and yielding a margin of safety of approximately 28%.

The share price declined 20.57% over the past year, determining a market capitalization of $2 billion and a 52-week range of $31.86 to $48.88.

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GuruFocus has assigned a score of 7 out of 10 to the company's financial strength and 8 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $44.67 per share.

Advanced Micro Devices

The second stock that makes the cut is Advanced Micro Devices Inc. (

AMD, Financial), a Santa Clara, California-based global semiconductors manufacturer.

The stock closed at $110.74 per share on Thursday, below the intrinsic value of $273.28 from the DCF model and yielding a margin of safety of approximately 82%.

The share price declined by 18.90% over the past year, determining a market capitalization of $92.93 billion and a 52-week range of $102.99 to $167.06.

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

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $163.99 per share.

RLX Technology

The third stock that qualifies is RLX Technology Inc. (

RLX, Financial), a Chinese manufacturer, distributor and seller of e-vapor products.

The stock was trading at $1.98 per share at close on Thursday, below the intrinsic value of $3.16 from the DCF model and yielding a roughly 42% margin of safety.

The share price has dropped 84.22% over the past year, determining a market capitalization of $2.86 billion and a 52-week range of $1.16 to $12.76.

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GuruFocus has assigned a score of 8 out of 10 to the company's financial strength and 4 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of hold and an average target price of $5.60 per share.

CNH Industrial

The fourth stock to consider is CNH Industrial N.V. (

CNHI, Financial), a U.K.-based producer and seller of farm and construction equipment and vehicles.

The stock was trading at $14.78 per share at close on Thursday, below the intrinsic value of $16.40 from the DCF model and yielding a roughly 17.6% margin of safety.

The share price has dropped 7.1% over the past year, determining a market capitalization of $23.34 billion and a 52-week range of $13.05 to $17.13.

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GuruFocus has assigned a score of 5 out of 10 to the company's financial strength and 7 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $18.79 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
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