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6 Stocks Trading Below Peter Lynch Value

Applied Materials, Morgan Stanley among companies with wide margins of safety and strong performances

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Tiziano Frateschi
Oct 10, 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.

D.R. Horton Inc. (

DHI, Financial) is trading around $41.08 per share. The Peter Lynch value gives the stock a fair price of $66.5, which suggests it is undervalued with a margin of safety of 39%. The stock started its positive upward trend three months ago; it now registers a positive performance of 19.4%.

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The residential homebuilder has a market cap of $15.2 billion and an enterprise value of $17.62 billion.

The stock is trading with a price-earnings (P/E) ratio of 15.27, which is higher than 53% of companies in the Global Residential Construction industry. The price is 1.07% below its 52-week high and 52.19% above its 52-week low. The price-book (P/B) ratio is 2.04.

With 1.36% of outstanding shares, 

Andreas Halvorsen (Trades, Portfolio) is the company's largest shareholder among the gurus, followed by Ken Heebner (Trades, Portfolio) with 0.35%, Ruane Cunniff (Trades, Portfolio) with 0.12% and  Ken Fisher (Trades, Portfolio) with 0.11%.

Applied Materials Inc. (

AMAT, Financial) is trading around $52.40 per share. The Peter Lynch value gives the stock a fair price of $70.25, which suggests it is undervalued with a margin of safety of 27%. The stock started its positive upward trend three months ago; it registered a positive performance of 24.7% as of Monday.

The semiconductor equipment manufacturer has a market cap of $51.43 billion and an enterprise value of $52.92 billion.

The stock is trading with a P/E ratio of 18.30, which is higher than 61% of companies in the Global Semiconductor Equipment and Materials industry. The price is 2.28% below its 52-week high and 86.61% above its 52-week low. The P/B ratio is 6.34.

The company's largest shareholder among the gurus is the 

T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.54% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 0.42%, Joel Greenblatt (Trades, Portfolio) with 0.11%, David Carlson (Trades, Portfolio) with 0.11% and Heebner with 0.07%.

Morgan Stanley (

MS, Financial) is trading around $49.63 per share. The Peter Lynch value gives the stock a fair price of $87.25, suggesting it is undervalued with a margin of safety of 43%. The stock started its positive upward trend three months ago; it currently registers a positive performance of about 8%.

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The investment bank has a market cap of $91.15 billion and enterprise value of $241.18 billion.

The stock is trading with a P/E ratio of 14.22, which is higher than 65% of companies in the Global Capital Markets industry. The price is 0.66% below its 52-week high and 60.30% above its 52-week low. The P/B ratio is 1.27.

Jeff Ubben (Trades, Portfolio) is the company's largest guru shareholder with 0.97% of outstanding shares, followed by the T Rowe Price Equity Income Fund with 0.58%,

Richard Pzena (Trades, Portfolio) with 0.5% and Diamond Hill Capital (Trades, Portfolio) with 0.44%

CalAtlantic Group Inc. (

CAA, Financial) is trading around $38.32 per share. The Peter Lynch value gives the stock a fair price of $90, suggesting it is undervalued with a margin of safety of 57%. The stock started its positive upward trend three months ago; during the last trading session, it registered a positive performance of about 9%.

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The residential construction company has a market cap of $4.22 billion and enterprise value of $7.93 billion.

The stock is trading with a P/E ratio of 10.64, which is higher than 74% of companies in the Global Residential Construction industry. The price is 0.83% below its 52-week high and 26.94% above its 52-week low. The P/B ratio is 0.99.

With 2.01% of outstanding shares, Fisher is the company's largest guru shareholder, followed by

Paul Tudor Jones (Trades, Portfolio) with 0.11%, Jim Simons (Trades, Portfolio) with 0.1% and David Dreman (Trades, Portfolio) with 0.01%.

Meritage Homes Corp. (

MTH, Financial) is trading around $47.55 per share. The Peter Lynch value gives the stock a fair price of $91, which suggests it is undervalued with a 48% margin of safety. The stock started its positive upward trend three months ago; it now registers a positive performance of about 14%.

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The construction company has a market cap of $1.9 billion and enterprise value of $3.04 billion.

The stock is trading with a P/E ratio of 12.92, which is higher than 64% of companies in the Global Residential Construction industry. The price is 0.42% below its 52-week high and 58.42% above its 52-week low. The P/B ratio is 1.24.

The company's largest guru shareholder is Fisher with 4.27% of outstanding shares, followed by Cunniff with 0.78%, Heebner with 0.05% and Dreman with 0.02%.

Advanced Energy Industries Inc. (

AEIS, Financial) is trading around $83.29 per share. The Peter Lynch value gives the stock a fair price of $94, which suggests it is undervalued with a 12% margin of safety. The stock started its positive upward trend three months ago; it now registers a positive performance of 27.5%.

The electronic components manufacturer has a market cap of $3.32 billion and enterprise value of $2.96 billion.

The stock is trading with a P/E ratio of 21.13, which is higher than 51% of companies in the Global Electronic Components industry. The price is 3.69% below its 52-week high and 82.69% above its 52-week low. The P/B ratio is 6.83.

The company's largest shareholder among the gurus is Simons with 1.21% of outstanding shares, followed by

Columbia Wanger (Trades, Portfolio) with 1.04%, Chuck Royce (Trades, Portfolio) with 0.93% and Fisher with 0.47%.

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

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