Ken Heebner (Trades, Portfolio) is the co-founder of Capital Growth Management, which is a privately owned investment manager. It was founded in 1990 and is based in Boston and the firm invests in the public equity markets of the United States. The firm provides its services to charitable organizations, pension and profit sharing plans, investment companies, and high net worth individuals.
His portfolio is composed of 67 stocks and 33 of them are new stock bought during the last quarter. The total value of the portfolio is now $3,656 million and the following are the stocks that are trading with lowest P/E ratio and may be attractive for other investors.
Santander Consumer USA Holdings Inc
Santander Consumer USA Holdings Inc (SC, Financial) is a technology-driven consumer finance company providing vehicle finance and unsecured consumer lending products.
Recently the company has received recommendation from many analysts. Four analysts have rated the company as a strong buy. The shares has been rated as hold from seven Wall Street Analysts. Eight analysts have suggested a buy for the company.
The stock is currently trading at very cheap P/E ratio of 9.50, +4.52% from its 52 weeks low and -0.92% from its 52 weeks high. Despite the low P/E, over the past 12 months, the price rose by 38%.
The DCF model, gives a fair value of $40.27 that put the stock as Undervalued and with a margin of safety of 35% at current prices. The Peter Lynch value gives a fair value of of $36.6.
Ratios: SC has a ROA of 3.12% that is ranked higher than 94% of the 1171 companies in the Global Specialty Finance industry and a ROE of 29.13 % that is ranked higher than 75% of its competitors.
Over the last 12 months, revenue grew by 17.90%, EBITDA by 110.90% and book value by 31.90%.
Ken Heebner (Trades, Portfolio) bought 0.47% of outstanding shares during Q1 of 2015 as well as David Einhorn (Trades, Portfolio) (0.66%). But the main holder of the company, with 3.88% of outstanding shares is still Lee Ainslie (Trades, Portfolio) even so he reduced his stake by 6.09% during the last quarter.
Taylor Morrison Home Corp
Taylor Morrison Home Corp (TMHC) originally commenced its homebuilding operations in 1936. It currently operates under Taylor Morrison brand in the United States and under Monarch brand in Canada.
The stock is currently trading with the cheapest P/E ratio of its history, 10.50, +35.16% from its 52 weeks low and -12.54% from its 52 weeks high. Over the past 12 months, the price dropped by 5%.
The DCF model, gives a fair value of $12.24 that put the stock as overpriced by 65% at current prices. The Peter Lynch value gives almost the same fair value ($12.2).
Ratios: TMHC has a ROA of 2.20% that is ranked higher than 55% of the 548 companies in the Global Residential Construction industry and a ROE of 18.83% that is ranked higher than 83% of its competitors.
Over the last 12 months, revenue grew by 34.50%, EBITDA by 31.20% and book value by 17.90%.
Ken Heebner (Trades, Portfolio) holds 500,000 shares of TMHC (0.41% of shares outstanding). The main holder is Alan Fournier (Trades, Portfolio) with 2,510,407 shares (2.05% of shares outstanding) while the Guru with the biggest impact on his portfolio of TMHC’s shares is Arnold Schneider (Trades, Portfolio) (an impact of 1.61% on his total assets).
Springleaf Holdings Inc
Springleaf Holdings Inc (LEAF) is a consumer finance company providing loan products to customers through its nationwide branch network and through iLoan, its internet lending division.
The stock is currently trading at 12.00 of P/E +90.71% from its 52 weeks low and -12.33% from its 52 weeks high. Over the past 12 months, the price rose by 74%.
The DCF model, gives a fair value of $64.46 that put the stock as undervalued and with a margin of safety of 26% at current prices. The Peter Lynch value gives a few higher fair value of $70.4.
Ratios: LEAF has a ROA of 3.98% that is ranked higher than 63% of the 191 companies in the Global Credit Services industry and a ROE of 26.74% that is ranked higher than 83% of its competitors. While ROA is now at its all time highs, ROE is still far from the top performance that was 66.88 just five years back.
Over the last 12 months, revenue grew by 33.90%, EBITDA by 531.80% and book value by 31.40%.
Ken Heebner (Trades, Portfolio) is the main guru holding LEAF with 610,000 shares (0.45% of shares outstanding, or 0.86% of total assets of its portfolio) followed by Jim Simons (Trades, Portfolio) with 0.11% of shares outstanding that is the 0.02% of his total assets.
Meritage Homes Corp
Meritage Homes Corp (MTH) is a real estate investment trust in Maryland. It is a designer and builder of single-family attached and detached homes which offers first-time, move-up, luxury and active adult homes to its targeted customer base.
MTH has received an average recommendation of “Hold” from the eleven brokerages that are covering the stock, Market Beat Ratings reports. Two investment analysts have rated the stock with a sell rating, six have issued a hold rating and three have given a buy rating to the company. The stock is currently trading with a P/E of 13.60 +37.52% from its 52 weeks low and -12.67% from its 52 weeks high. Over the past 12 months, the price rose by 7%.
The DCF model, gives a fair value of $47.06 that put the stock as undervalued and with a margin of safety of 7% at current prices. The Peter Lynch value gives a price of $49.5.
Ratios: MTH has a ROA of 5.91% that is ranked higher than 75% of the 548 companies in the Global Residential Construction industry and a ROC of 648.92 % that is ranked higher than 99% of its competitors.
Over the last 12 months, revenue grew by 13.90% and book value grew by 14.10% while EBITDA dropped by 10.40%
Ken Heebner (Trades, Portfolio) is the second main holder of the company with 0.88% of shares outstanding (0.47% of his total assets). The main holder is Ken Fisher (Trades, Portfolio) with 1,337,190 shares (3.37% of shares outstanding, or 0.13% of total assets of his portfolio).
Lumber Liquidators Holdings Inc
Lumber Liquidators Holdings Inc (LL) is a specialty retailer of hardwood flooring. It offers a complete assortment of hardwood flooring that includes prefinished premium domestic and exotic hardwoods, engineered hardwoods, unfinished hardwoods, bamboo, cork and laminates.
The stock is currently trading with a P/E ratio of 14.00. After a rally to $23.20 instigated by a rumor of the company being bought by Home Depot (HD), the price is migrating towards its 3 1/2-year low made on June 9 at $20.01 (-73% over the last 12 months) and is now +5.85% from its 52 weeks low and -73.57% from its 52 weeks high.
The DCF model, gives a fair value of $42.14 that put the stock as undervalued and with a margin of safety of 50% at current prices. By contrast the Peter Lynch earnings line gives a very lower fair value of $28.8, so the stock is still undervalued but with a lower margin of safety.
Ratios: LL has a ROA of 8.38% that is ranked higher than 80% of the 788 companies in the Global Home Improvement Stores industry and a ROE of 12.35% that is ranked higher than 69% of its competitors. These returns are the lowest returns the company ever had.
Over the last 12 months, revenue grew by 17.20% and book value grew by35.20% while all the other ratios are dropping (EBITDA by 23.40%, and EPS by 42.70%)
Steven Cohen (Trades, Portfolio) is the main guru holding LL with 1,145,200 shares (4.23% of shares outstanding, or 0.24% of total assets of his portfolio). Ken Heebner (Trades, Portfolio) holds 1.11% of shares outstanding and LL represents the 0.25% of his total assets.
Ryland Group Inc
Ryland Group Inc (RYL) is a homebuilder and a mortgage-finance company that consists of six operating business segments namely four geographically determined homebuilding regions; financial services, and corporate.
The stock is currently trading at 14.50 of P/E. During the last 12 months the price rose by 21% and is now +49.75% from its 52 weeks low and -8.54% from its 52 weeks high.
Both the DCF model and the Peter Lynch earnings line gives a fair value of about $45.50 that put the stock as fairly valued at current prices.
Ratios: RYL has a ROA of 6.17% that is ranked higher than 76% of the 548 companies
in the Global Residential Construction industry and a ROE of 17.35% that is ranked higher than 80% of its competitors.
Over the last 12 months, revenue grew by 15.80%, EBITDA by 28.70% and book value grew by 18.30%.
Ken Fisher (Trades, Portfolio) is the main guru holding RYL with 2,26) 7,283 shares (4.85% of shares outstanding, or 0.23% of total assets of its portfolio, followed by David Tepper (Trades, Portfolio) (1.57% of shares outstanding) and Ken Heebner (Trades, Portfolio) that holds 0.94% of RYL’s outstanding shares.
