5 Undervalued Companies With Predictable Businesses

Westlake Chemical, CarMax top the list

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Oct 22, 2018
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According to the GuruFocus All-in-One Screener, the following companies have high business predictability ratings and a wide margin of safety.

Westlake Chemical Corp. (WLK, Financial)

The company has a 3.5-star out of five business predictability rating and, according to the discounted cash flow calculator, a 54% margin of safety at $74 per share.

The company, which manufactures basic chemicals, has a market cap of $9.7 billion. Over the last five years, its revenue has increased 16.10% and its earnings per share have grown 15.30%.

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The stock has fallen 6% over the last 12 months and is currently trading with a price-earnings ratio of 6.51 and a price-book ratio of 1.80. The price has been as high as $124.29 and as low as $77.77 in the last 52 weeks. It is currently 36.60% below its 52-week high and 1.32% above its 52-week low.

With 0.31 of outstanding shares, Jim Simons (Trades, Portfolio) is the company's largest guru shareholder, followed by Ken Heebner (Trades, Portfolio) with 0.28%, Chuck Royce (Trades, Portfolio) with 0.28% and Joel Greenblatt (Trades, Portfolio) with 0.12%.

CarMax Inc. (KMX, Financial)

The company has a three-star business predictability rating and, according to the DCF calculator, a 38% margin of safety at $68 per share.

The company, which operates an auto dealership, has a market cap of $12 billion. Over the last five years, its revenue has increased 14.40% and its earnings per share have grown 14.10%.

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The stock has fallen 7% over the last 12 months and is currently trading with a price-earnings ratio of 16.9 and a price-book ratio of 3.47. The price has been as high as $81.67 and as low as $57.05 in the last 52 weeks. As of Monday, it is 14.39% below its 52-week high and 22.56% above its 52-week low.

With 7.17% of outstanding shares, PRIMECAP Management (Trades, Portfolio) is the company's largest guru shareholder, followed by Ruane Cunniff (Trades, Portfolio) with 6.84%, Chuck Akre (Trades, Portfolio) with 3.01% and Lou Simpson (Trades, Portfolio) with 2.83%.

Baidu Inc. (BIDU, Financial)

The company has a three-star business predictability rating and, according to the DCF calculator, a 38% margin of safety at $200 per share.

The largest search engine in China has a $69 billion market cap. Over the last five years, its revenue has grown 28.60% and its earnings per share have grown 9.60%.

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The stock has climbed 24% over the last 12 months; it is currently trading with a price-earnings ratio of 17.40 and a price-book ratio of 2.98. The price has been as high as $284.22 and as low as $189 in the last 52 weeks. It is currently 29.38% below its 52-week high and 6.20% above its 52-week low.

The company's largest guru shareholder is Sarah Ketterer (Trades, Portfolio) with 1.12% of outstanding shares, followed by Dodge & Cox with 0.97%, Frank Sands (Trades, Portfolio) with 0.78% and First Pacific Advisors (Trades, Portfolio) with 0.59%.

Novo Nordisk A/S (NVO, Financial)

The company has a 4.5-star business predictability rating and, according to the DCF calculator, has a 40% margin of safety at $43.5 per share.

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The health care company has a market cap of $103.26 billion. Over the last five years, its revenue has grown 10.80% and its earnings per share have climbed 15.80%.

The stock fell 14% over the last 12 months; it is currently trading with a price-earnings ratio of 17.55 and a price-book ratio of 13.86. The price has been as high as $58.37 and as low as $41.23 in the last 52 weeks. It is currently 24.85% below its 52-week high and 5.51% above its 52-week low.

With 0.8% of outstanding shares, Simons is the company's largest guru shareholder, followed by Ken Fisher (Trades, Portfolio) with 0.56% and Jeremy Grantham (Trades, Portfolio) with 0.03%.

Ingles Markets Inc. (IMKTA, Financial)

The company has a 3.5-star business predictability rating and, according to the DCF calculator, a 38% margin of safety at $33 per share.

The company, which operates grocery stores, has a market cap of $666 million. Over the last five years, its revenue has grown 5.60% and its earnings per share have increased 17.40%.

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The stock has climbed 34% over the last 12 months; it is currently trading with a price-earnings ratio of 6.65 and a price-book ratio of 1.11. The price has been as high as $37.65 and as low as $22.63 in the last 52 weeks. It is currently 14.13% below its 52-week high and 42.85% above its 52-week low.

The company's largest guru shareholder is Mario Gabelli (Trades, Portfolio) with 5.75% of outstanding shares.

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

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