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Paul Tudor Jones' Undervalued Stocks Trading With Low P/E Ratio

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Jul 20, 2015
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Paul Tudor Jones (Trades, Portfolio) is the president and founder of Tudor Investment Corporation which is the group of affiliated entities engaged in the management of client and proprietary assets. Paul Tudor Jones (Trades, Portfolio) II formed Tudor Investment Corporation, the first of the Tudor Group companies, in 1980. The investment strategies of the Tudor Group include, among others, discretionary global macro, quantitative global macro (managed futures), quantitative equity systems and discretionary equity long/short.

His portfolio is composed of 1,423 stocks, 349 of which were bought during the first quarter of 2015. The total value of his portfolio is $3,126 million with 37% Q/Q turnover.

The following are five of the 1,423 stocks of his portfolio that are trading with a very low P/E and are undervalued according to the DCF calculator.

Cloud Peak Energy Inc (CLD)

The company is a producer of coal in the U.S. and in the Powder River Basin, or PRB, based on 2008 coal production. It operates some of the safest mines in the industry and solely in the PRB, the lowest cost coal producing region of the major coal producing regions in the U.S., and operates two of the five largest coal mines in the region and in the U.S.

CLD is trading at about $3.30 with a trailing 12-month P/E multiple of 2.40 and an estimated P/E(NRI) multiple of 2.50. Over the last 10 years, the stock has dropped by 76%, and during the last 52 weeks has been as high as $16.36 and as low as $3.57. Its 200-day moving average is $7.91.

The DCF model gives a fair value of $21.54 that puts the stock as undervalued and with a margin of safety of 83% at current prices. The fair value is confirmed even by the Peter Lynch earnings line at $20.50..

Jim Simons (Trades, Portfolio) is the main guru holding CLD with 938,296 shares, that is 1.54% of shares outstanding, or 0.01% of total assets of his portfolio. Donald Smith (Trades, Portfolio) is second with 1.28% of shares outstanding, followed by Arnold Van Den Berg (Trades, Portfolio) with 0.52%.

First BanCorp (FBP)

The Company is a provider of financial services and products with operations in Puerto Rico, the United States and the US and British Virgin Islands. It provides financial services for retail, commercial and institutional clients. The Company has six reportable segments: Consumer (Retail) Banking; Commercial and Corporate Banking; Mortgage Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations.

FBP is trading at about $4.60 with a trailing 12-month P/E multiple of 2.50 and an estimated forward P/E multiple of 21.19. Over the last 10 years, the stock has dropped by 99%, and during the last 52 weeks has been as high as $6.76 and as low as $4.16. Its 200-day moving average is $5.76.

The DCF model gives a fair value of $27.88 that puts the stock as undervalued and with a margin of safety of 83% at current prices. The same fair price is confirmed by the Peter Lynch earnings line at $28.10.

Howard Marks (Trades, Portfolio) is the main guru holding FBP with 41,843,581 shares, that is 19.57% of shares outstanding, or 4.18% of total assets of his portfolio. The second position is HOTCHKIS & WILEY with 0.97% of shares outstanding, followed by Jim Simons (Trades, Portfolio) with 0.24%.

Weight Watchers International Inc (WTW)

The Company is a global-branded consumer company and is a provider of weight management services, operating globally through a network of Company-owned and franchise operations. It offers services and products that are built upon its weight management plans which are comprised of a range of nutritional, exercise and behavioral tools and approaches.

WTW is trading at about $4 with a trailing 12-month P/E multiple of 2.60 and an estimated forward P/E multiple of 20.75. Over the last 10 years, the stock has dropped by 92%, and during the last 52 weeks has been as high as $29.84 and as low as $3.67. Its 200-day moving average is $15.32.

The DCF model gives a fair value of $18.72 that puts the stock as undervalued and with a margin of safety of 78% at current prices. The Peter Lynch earnings line gives an even wider margin of safety, while it gives as fair value the price of $27.6.

John Burbank (Trades, Portfolio) is the main guru holding WTW with 300,000 shares, that is the 0.52% of shares outstanding, or 0.05% of total assets of his portfolio. On second position there is Joel Greenblatt (Trades, Portfolio) with 0.49% of shares outstanding, followed by Jeff Auxier (Trades, Portfolio) with 0.13%.

Denbury Resources Inc (DNR)

The Company is a domestic oil and natural gas producer in Mississippi and Montana. Its oil and natural gas properties are concentrated in the Gulf Coast and Rocky Mountain regions in the United States. Currently its properties with proved and producing reserves in the Gulf Coast region are situated in Mississippi, Texas, Louisiana and Alabama, and in the Rocky Mountain region are situated in Montana, North Dakota, and Wyoming.

DNR is trading at about $4.30 with a trailing 12-month P/E multiple of 3.40 and an estimated forward P/E multiple of 30.03. Over the last 10 years, the stock has dropped by 59%, and during the last 52 weeks has been as high as $18.07 and as low as $4.41. Its 200-day moving average is $8.41.

The DCF model gives a fair value of $19.77 that puts the stock as undervalued and with a margin of safety of 77% at current prices. The Peter Lynch earnings line gives an even wider margin of safety while it gives as fair value the price of $23.70.

Jim Simons (Trades, Portfolio) is the main guru holding DNR with 1,913,535 shares, that is the 0.54% of shares outstanding or 0.03% of total assets of his portfolio. The second largest stake is held by David Dreman (Trades, Portfolio) (0.20% of shares outstanding) followed by Ray Dalio (Trades, Portfolio) who holds 0.10%.

Century Aluminum Co (CENX)

The Company is primary aluminum producer. Company operates its business through one reportable segment, primary aluminum. Primary aluminum is an internationally traded commodity and its price is effectively determined on the London Metal Exchange. Its facilities produce standard grade and value-added primary aluminum products.

CENX is trading at about $9, with a trailing 12-month P/E multiple of 4.40 and an estimated forward P/E multiple of 7.12. Over the last 10 years, the stock has dropped by 61%, and during the last 52 weeks has been as high as $31.75 and as low as $9.25. Its 200-day moving average is $18.93.

The DCF model gives a fair value of $32.75 that put the stock as undervalued and with a margin of safety of 71% at current prices. The Peter Lynch earnings line fair value is $25.9 that puts the stock as undervalued but with a smaller margin of safety.

Chuck Royce (Trades, Portfolio)is the main guru holding CENX with 1,354,841 shares, that is the 1.56% of CENX’s shares outstanding. The second guru is Steven Cohen (Trades, Portfolio) with 0.14% followed by Paul Tudor Jones (Trades, Portfolio) who holds 0.11% of outstanding shares of the company.

Summary :

Ticker

P/E

Margin of Safety (DCF)

CLD

2.40

83%

FBP

2.50

83%

WTW

2.60

78%

DNR

3.40

77%

CENX

4.40

71%

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