7 Rising Stocks With Margins of Safety

Peter Lynch identifies undervalued stocks with great price momentum

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Jun 15, 2017
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According to the GuruFocus All-in-One Screener, several gurus are focusing on stocks whose Peter Lynch fair values are far above the current prices. The following stocks are trading with wide margins of safety and have positive performances over the past 12 months.

BBVA Banco Frances S.A. ADRĂ‚ (BFR) is trading around $19.03 per share. The Peter Lynch value gives the stock a fair price of $22.94 so the stock is undervalued with a margin of safety of 56%. The stock started its positive upward trend three months ago; it now registers a positive performance of 8.6%.

BBVA Banco Frances is a banking services company that caters to individuals and corporates through retail, corporate and investment banking services.

The stock is trading with a price-earnings (P/E) ratio of 13.21, which is higher than 56% of companies in the Global Banks - Regional - Latin America industry. The price is 13.34% below its 52-week high and 17.74% above its 52-week low. The price-book (P/B) ratio is 3.11.

Jim Simons (Trades, Portfolio) with 0.1% of outstanding shares is the largest investor among the gurus followed by Caxton Associates (Trades, Portfolio) with 0.02% and Ken Fisher (Trades, Portfolio) with 0.01%.

The Kroger Co. (KR) is trading around $30.28 per share. The Peter Lynch value gives the stock a fair price of $47.63 so the stock is undervalued with a margin of safety of 36%. The stock started its positive upward trend three months ago; it now registers a positive performance of 5.9%.

Kroger operates retail food and drug stores, multidepartment stores, jewelry stores and convenience stores throughout the U.S. It also manufactures and processes some of the food for sale in its supermarkets.

The stock is trading with a P/E ratio of 14.84 which is higher than 74% of companies in the Global Grocery Stores industry. The price is 20.25% below its 52-week high and 7.03% above its 52-week low. The P/B ratio is 4.18.

The largest shareholder among the gurus is Joel Greenblatt (Trades, Portfolio) with 0.14% followed by Pioneer Investments (Trades, Portfolio) with 0.13%, John Burbank (Trades, Portfolio) with 0.06%, Jeff Auxier (Trades, Portfolio) with 0.04%, Caxton Associates with 0.02%, Fisher with 0.02% and David Dreman (Trades, Portfolio) with 0.01%.

Gentherm Inc. (THRM) is trading around $38.95 per share. The Peter Lynch value gives the stock a fair price of $69.75 so the stock is undervalued with a margin of safety of 44%. The stock started its positive upward trend three months ago; it now registers a positive performance of 7.9%.

Gentherm is an automotive parts manufacturer. Its products include thermal temperature control devices and seat comfort cable systems.

The stock is trading with a P/E ratio of 15.89, which is higher than 56% of companies in the Global Auto Parts industry. The price is 2.38% below its 52-week high and 46.43% above its 52-week low. The P/B ratio is 2.87.

The largest shareholder among the gurus is Mairs and Power (Trades, Portfolio) with 1.98% followed by Richard Snow (Trades, Portfolio) with 0.7%.

CGI Group Inc. Class A (GIB) is trading around $49.64 per share. The Peter Lynch value gives the stock a fair price of $74.11 so the stock is undervalued with a margin of safety of 33%. The stock started its positive upward trend three months ago; it now registers a positive performance of 5.5%.

CGI Group manages information technology services. Its services include the management of IT and business functions, systems integration and consulting as well as the sale of software solutions.

The stock is trading with a P/E ratio of 18.88, which is higher than 69% of companies in the Global Information Technology Services industry. The price is 3.22% below its 52-week high and 21.43% above its 52-week low. The P/B ratio is 3.15.

Jeremy Grantham (Trades, Portfolio) with 0.28% of outstanding shares is the largest investor among the gurus followed by Simons with 0.08% and Greenblatt with 0.02%.

GATX Corp. (GATX) is trading around $64.65 per share. The Peter Lynch value gives the stock a fair price of $76.93 so the stock is undervalued with a margin of safety of 16%. The stock started its positive upward trend three months ago; it now registers a positive performance of 10.6%.

GATX leases, operates, manages and remarkets long-lived used assets in the rail and marine market. It also provides leasing, shipping, asset remarketing and asset management services.

The stock is trading with a P/E ratio of 10.63, which is higher than 83% of companies in the Global Rental & Leasing Services industry. The price is 2.49% below its 52-week high and 59% above its 52-week low. The P/B ratio is 1.83.

The largest shareholder among the gurus is Mario Gabelli (Trades, Portfolio) with 7.17% followed by Greenblatt with 0.35%, John Hussman (Trades, Portfolio) with 0.15% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.

Southwest Airlines Co. (LUV) is trading around $59.53 per share. The Peter Lynch value gives the stock a fair price of $94.51 so the stock is undervalued with a margin of safety of 37%. The stock started its positive upward trend three months ago; it now registers a positive performance of 12.8%.

Southwest Airlines is an operator of a passenger airline that provides scheduled air transportation in the U.S. and international markets.

The stock is trading with a P/E ratio of 17.93 that is lower than 78% of companies in the Global Airlines industry. The price is 2.79% below its 52-week high and 68.07% above its 52-week low. The P/B ratio is 4.39.

PRIMECAP Management (Trades, Portfolio) with 11.9% of outstanding shares is the largest investor among the gurus followed by Warren Buffett (Trades, Portfolio) with 7.88%, David Tepper (Trades, Portfolio) with 0.51%, Barrow, Hanley, Mewhinney & Strauss with 0.41%, NWQ Managers (Trades, Portfolio) with 0.31%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.26%, Simons with 0.26% and Mohnish Pabrai (Trades, Portfolio) with 0.05%.

Delta Air Lines Inc. (DAL) is trading around $51.91 per share. The Peter Lynch value gives the stock a fair price of $57.9 so the stock is undervalued with a margin of safety of 10%. The stock started its positive upward trend three months ago; it now registers a positive performance of 12.6%.

Delta Air Lines provides scheduled air transportation for passengers and cargo throughout the U.S. and around the world. The company's business segments are airline and refinery.

The stock is trading with a P/E ratio of 9.60, which is higher than 65% of companies in the Global Airlines industry. The price is 3.10% below its 52-week high and 59.23% above its 52-week low. The P/B ratio is 2.95.

The largest shareholder among the gurus is Buffett with 7.48% followed by PRIMECAP Management with 3.09%, Greenblatt with 0.18%, Steven Cohen (Trades, Portfolio) with 0.15%, Simons with 0.12%, Tepper with 0.09%, Grantham with 0.04% and Robert Olstein (Trades, Portfolio) with 0.03%.

Disclosure: I do not own any shares of any stocks mentioned in this article.