6 Undervalued Stocks With High Business Predictability

F5 Networks tops the list

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Dec 03, 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.

F5 Networks Inc. (FFIV, Financial)

The company has a business predictabilty rating of 3.5 out of five stars and, according to the discounted cash flow calculator, a 16% margin of safety at $172 per share.

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The provider of software-defined application services has a market cap of $10.59 billion. Over the last five years, its revenue has grown 12.90%.

The stock has climbed 32% over the last 12 months and is currently trading with a price-earnings ratio of 23.82 and a price-book ratio of 8.16. The price has been as high as $199.71 and as low as $126.02 in the last 52 weeks. As of Friday, it was 13.11% below its 52-week high and 37.70% above its 52-week low.

The company's largest guru shareholder is Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 3.35% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.16%, Joel Greenblatt (Trades, Portfolio)’s Gotham Asset Management with 0.14% and John Hussman (Trades, Portfolio) with 0.03%.

China Telecom Corp. Ltd.Ă‚ (CHA, Financial)

The company has a three-star business predictability rating and, according to the DCF calculator, a 17% margin of safety at $53.64 per share.

The provider of wireline and mobile telecommunication services has a market cap of $43.54 billion. Over the last five years, its revenue has increased 2.60% and its earnings per share have grown 2%.

The stock has risen 11% over the last 12 months and is currently trading with a price-earnings ratio of 15.03 and a price-book ratio of 0.89. The price has been as high as $54.10 and as low as $41.28 in the last 52 weeks. As of Friday, it is 0.78% below its 52-week high and 30.04% above its 52-week low.

With 0.02% of outstanding shares, Simons’ firm is the company's largest guru shareholder.

TJX Companies Inc. (TJX, Financial)

The company has a four-star business predictability rating and, according to the DCF calculator, a 15% margin of safety at $48 per share.

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The apparel and home fashions retailer has a $58.76 billion market cap. Over the last five years, its revenue has grown 9.90% and its earnings per share have grown 8.50%.

The stock climbed 26% over the last 12 months; it is currently trading with a price-earnings ratio of 19.37 and a price-book ratio of 11.19. The price has been as high as $56.64 and as low as $36.31 in the last 52 weeks. It is currently 16.21% below its 52-week high and 30.69% above its 52-week low.

The company's largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 1.32% of outstanding shares, followed by Diamond Hill Capital (Trades, Portfolio) with 0.56%, Ruane Cunniff (Trades, Portfolio) with 0.49% and Jeremy Grantham (Trades, Portfolio) with 0.42%.

Energy Transfer LP (ET, Financial)

The company has a 4.5-star business predictability rating and, according to the DCF calculator, a 15% margin of safety at $14.79 per share.

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The company, which operates natural gas gathering systems and gas processing plants, has a market cap of $38.71 billion. Over the last five years, its revenue has grown 8.50% and its earnings per share have climbed 36.90%.

The stock fell 10% over the last 12 months; it is currently trading with a price-earnings ratio of 12.75. The price has been as high as $19.34 and as low as $12.80 in the last 52 weeks. It is currently 23.73% below its 52-week high and 15.23% above its 52-week low.

With 0.38% of outstanding shares, David Tepper (Trades, Portfolio) is the company's largest guru shareholder, followed by Simons’ firm with 0.25%, Leon Cooperman (Trades, Portfolio) with 0.19% and T Boone Pickens (Trades, Portfolio) with 0.03%.

Dorman Products Inc. (DORM, Financial)

The company has a 4.5-star business predictability rating and, according to the DCF calculator, a 15% margin of safety at $87.94 per share.

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The company, which provides original equipment parts for automobiles, has a market cap of $2.91 billion. Over the last five years, its revenue has grown 11.10% and its earnings per share have increased 11.20%.

The stock has risen 31% over the last 12 months; it is currently trading with a price-earnings ratio of 24.06 and a price-book ratio of 4.15. The price has been as high as $91.32 and as low as $56.36 in the last 52 weeks. It is currently 4.22% below its 52-week high and 55.20% above its 52-week low.

The company's largest guru shareholder is Chuck Royce (Trades, Portfolio) with 2.39% of outstanding shares, followed by Third Avenue Management (Trades, Portfolio) with 0.13%, Murray Stahl (Trades, Portfolio) with 0.1% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.

CGI Group Inc. (GIB, Financial)

The company has a three-star business predictability rating and, according to the DCF calculator, a 16% margin of safety at $63.72 per share.

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The company, which offers information technology services, has a market cap of $17.52 billion. Over the last five years, its revenue has grown 14.20% and its earnings per share have climbed 18.30%.

The stock has risen 20% over the last 12 months; it is currently trading with a price-earnings ratio of 21.46 and a price-book ratio of 3.56. The price has been as high as $66.53 and as low as $52.54 in the last 52 weeks. It is currently 4.60% below its 52-week high and 20.80% above its 52-week low.

With 0.07% of outstanding shares, Pioneer Investments is the company's largest guru shareholder, followed by Greenblatt with 0.06% and Ray Dalio (Trades, Portfolio) with 0.05%.

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

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