The Undervalued Stocks Among Richard Snow's Recent Buys

Richard Snow (Trades, Portfolio) is the founder of Snow Capital, a boutique investment manager offering several value strategies available in multiple formats. Snow began his career investing the proceeds from the sale of the Snow family businesses. He relies on extensive research to determine the probability of a solution, gain confidence in the company’s ability to survive difficult times and estimate the value of the stock once the difficulty has passed.

He manages a portfolio of 133 stocks with a total value of $3,412 million; the following are the most undervalued companies he recently bought.

During the second quarter of 2015, he increased his stake in LB Foster Co. (FSTR) by 270.72%, and the company looks undervalued at the current price of $15.33. The DCF calculator gives a fair value of $63.26 with a current margin of safety of 76%.

The company is engaged in designing, marketing and distributing footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities. The company sells its products, including accessories such as handbags and loungewear, through quality domestic and international retailers, international distributors and directly to end-user consumers.

The stock is trading with a P/E ratio of 6.40, which is higher than 90% of other companies in the Global Railroads industry with an average P/E ratio of 16.30. The price has dropped 69% during the last 12 months, by 68% year to date and is now 71.83% below its 52-week high and 8.80% above its 52-week low.

LB Foster has a profitability and growth rating of 6/10 with positive returns: ROE of 7.39%, ROA of 4.45% and ROC of 20.81%. Return on assets is outperforming the industry, ranking higher than 63% of the company’s competitors, which have an average return of 3.12%. ROE is also performing well, outperforming 50% of the industry with an average ratio of 7.35%.

The company reported sales increased by 2.7%, due to a 99.7% increase in Tubular segment sales driven by recent acquisitions. It also had a 18.4% increase in Construction segment sales.

Chuck Royce (Trades, Portfolio) is the main shareholder of the company with a big stake of 13.82% of outstanding shares, followed by John Keeley (Trades, Portfolio) with 7.43% and Richard Snow (Trades, Portfolio) with 1.18%.

During the second quarter 2015, Snow increased his stake in Viacom Inc. (VIAB) by 21.60%, and the company looks undervalued at the current price of $15.33. The DCF calculator gives a fair value of $121.27 with a current margin of safety of 63%.Â

Viacom is an entertainment content company that connects with audiences through television content across television, motion picture, online and mobile platforms in more than 165 countries and territories. The company operates through two reporting segments: Media Networks, which includes MTV Networks, and Filmed Entertainment.

The stock is trading with a P/E ratio of 10.90, which is higher than 81% of other companies in the Global Media - Diversified industry, which has an average P/E ratio of 21. The price has dropped by 43% during the last 12 months, by 40% year to date and is now 44.05% below its 52-week high and 25.14% above its 52-week low.

Viacom has a profitability and growth rating of 7/10 with good returns: ROE of 53.97%, ROA of 7.81% and ROC of 206.79%. Return on assets is outperforming the industry, ranking higher than 77% of the company’s competitors, which have an average return of 1.82%. ROE is also performing well, outperforming 96% of the industry, which has an average ratio of 4.34%.

The company posted a 4% increase in adjusted diluted earnings per share, and quarterly revenues declined by 11% for the second quarter.

Manning & Napier Advisors Inc. is the main shareholder of the company with 3.03% of outstanding shares, followed by Donald Yacktman (Trades, Portfolio) with 2.33% and Warren Buffett (Trades, Portfolio) with 1.42%.

During the second quarter, he increased his stake in Big Lots Inc. (BIG) by 2.34%, and the company looks undervalued at the current price of $45.57. The DCF calculator gives a fair value of $75.44 with a current margin of safety of 40%. GuruFocus users put the stock as fairly valued, giving a fair price of $46.21.

The company manages its broadline closeout retailing business on the basis of two segments: U.S. and Canada.Â

The stock is trading with a P/E ratio of 17.21, ranked higher than 68% of other companies in the Global Discount Stores industry, which has an average P/E ratio of 21.80. The price has dropped 2% during the last 12 months, and has risen by 16% year to date and is now 11.94% below its 52-week high and 19.45% above its 52-week low.

Big Lots has a profitability and growth rating of 7/10 with good returns: ROE of 18.73%, ROA of 8.26% and ROC of 24%. Return on assets is outperforming the industry, ranking higher than 82% of the company’s competitors, which have an average return of 3.47%. ROE outperforms 81% of the industry, which has an average ratio of 8.75%.

Adjusted income from continuing operations was 40 cents per diluted share (non-GAAP), a 29% increase compared to the same quarter of a year before.Â

Snow is the main shareholder of the company with 3.55% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 3.01% and Westport Asset Management (Trades, Portfolio) with 0.93%.

Snow also increased his stake in Andersons Inc. (ANDE) by 249.28%, and the company looks undervalued at the current price of $35.54. The DCF calculator gives a fair value of $54.01 with a current margin of safety of 34%.

The company is engaged in grain, ethanol and plant nutrient industries of U.S. agriculture, as well as in railcar leasing and repair, turf products production and general merchandise retailing. The company's operations are classified into six reportable business segments: Grain, Ethanol, Rail, Plant Nutrient, Turf & Specialty and Retail.

The stock is trading with a P/E ratio of 13.30, which is higher than 82% of other companies in the Global Food Distribution industry, which has an average P/E ratio of 21.80. The price has dropped by 46% during the last 12 months, by 33% year to date and is now 47.05% below its 52-week high and 11.38% above its 52-week low.

Andersons has a profitability and growth rating of 6/10 with positive returns: ROE of 9.90%, ROA of 3.61% and ROC of 20.34%. Return on assets is outperforming the industry, ranking higher than 52% of the company’s competitors, which have an average return of 3.47%. ROE is outperforming 55% of the industry, which has an average ratio of 8.75%.

Jim Simons (Trades, Portfolio) is the main shareholder of the company with 2.47% of outstanding shares, followed by Ricahrd Snow with 0.44% and Paul Tudor Jones (Trades, Portfolio) with 0.03%.

Snow increased his stake in Biogen Inc. (BIIB) by 320%, and the company looks undervalued at the current price of $319.56. The DCF calculator gives a fair value of $420.76 with a current margin of safety of 24%.Â

The biotechnology company discovers, develops, manufactures and markets therapies for the treatment of autoimmune disorders, neurodegenerative diseases and hemophilia.Â

The stock is trading with a P/E ratio of 21.56, which is ranked higher than 70% of other companies in the Global Biotechnology industry, which has an average P/E ratio of 33.20. The price has dropped by 2% during the last 12 months, by 7% year to date and is now 33.45% below its 52-week high and 20.59% above its 52-week low.

Biogen has a profitability and growth rating of 8/10 with strong returns: ROE of 31.71%, ROA of 23.93% and ROC of 189.05%. Return on assets is outperforming the industry, ranking higher than 97% of the company’s competitors, which have an average return of -27.09%. ROE is outperforming 95% of the industry, which has an average negative ratio of 32.27%.

During the last quarter, the company reported a 7% increase in revenue and 21% increase in non-GAAP diluted earnings per share. Revenue growth is expected to be approximately 6% to 8% compared to 2014, and non-GAAP diluted EPS is expected to be between $15.50 and $15.95, a decrease from prior guidance.

The main shareholder is PRIMECAP Management (Trades, Portfolio) with a big stake of 7.02% of outstanding shares. The second is Frank Sands (Trades, Portfolio) who holds 2.01% of outstanding shares, followed by Vanguard Health Care Fund (Trades, Portfolio) with 0.76%.

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