As of this writing, the following stocks look undervalued by the market as their price-earnings ratios without non-recurring items trade below 20 while their price-earnings to growth (PEG) ratios trade near or below 1.
Furthermore, Wall Street sell-side analysts have issued positive recommendation ratings for them, which indicates these stocks are expected to trade higher over the coming months.
PagSeguro Digital Ltd
The first company that makes the cut is PagSeguro Digital Ltd (PAGS, Financial), a Brazilian provider of financial technology solutions and services to micro, small and medium-sized merchants in Brazil and internationally.
As of regular trading hours on Tuesday, the price-earnings ratio without NRI was 17.95, which is more compelling than the industry median of 24.13. The PEG ratio of 0.55 is also more compelling than the industry median of 1.43.
Shares traded around $13.03 per share on Sept. 27. The stock has dropped by 75.5% over the past year for a market capitalization of $4.54 billion and a 52-week range of $9.45 to $56.74.
Wall Street sell-side analysts issued a median recommendation rating of overweight and an average target price of approximately $108.02 per share for the stock.
LKQ Corp
The second company to meet the criteria is LKQ Corp. (LKQ, Financial), a Chicago, Illinois-based auto parts distributor serving non-OEM automotive markets. The company's portfolio includes new mechanical and collision parts, specialty auto equipment and remanufactured and recycled parts in Europe and North America. The company also operates a car salvage business and owns more than 70 LKQ pick-your-part junkyards. Apart from the self-service business, LKQ annually purchases more than 300,000 scrap cars that are used to extract parts for resale. The company has 1,700 facilities around the world.
As of regular hours on Tuesday, the price-earnings ratio without NRI was 11.43, which is more appealing than the industry median of 17.61, while the PEG ratio of 0.99 has more appeal than the industry median of 1.75.
The price was $47.22 per share on Sept. 27 after falling 8.56% over the past year. The market capitalization is $13.18 billion and the 52-week range is $42.36 to $60.43.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock and have established an average target price of $63.56 per share.
Summit Materials Inc.
The third company that qualifies is Summit Materials Inc. (SUM, Financial), a Denver, Colorado-based manufacturer and seller of building materials and related products used in the construction of public infrastructure and residential and non-residential buildings. In recent years, the company has grown primarily through acquisitions and is now one of the top 10 aggregates suppliers and top 15 cement producers in the U.S.
As of regular hours on Tuesday, the price-earnings ratio without NRI was 10.42, which is more compelling than the industry median of 13.09, but the PEG ratio of 0.96 is a little less compelling than the industry median of 0.85.
The price was $24.11 per share on Sept. 27, reflecting a 26% decrease over the past year for a market capitalization of $2.89 billion and a 52-week range of $21.99 to $41.46.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock and have established an average target price of $37.88 per share.
