6 Undervalued Stocks With Positive Earnings Growth Estimates

Gilead, Activision Blizzard make the list

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Mar 14, 2019
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According to the GuruFocus All-in-One Screener, the following stocks are trading at a discount and have positive three- to five-year future earnings estimates.

Autoliv Inc. (ALV) is trading around $78 per share. The discounted cash flow calculator gives the stock a fair value of $101.98 per share, suggesting it has a 23% margin of safety at current prices.

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The manufacturer of passive and active safety systems has a GuruFocus profitability and growth rating of 6 out of 10. Its earnings per share have increased 0.60% over the last five years. Analysts project a three-year to five-year earnings growth rate of 8.70%. The return on equity of 6.72% and return on assets of 2.53% are underperforming 61% of companies in the Global Auto Parts industry.

Jim Simons (Trades, Portfolio)’ Renaissance Technologies is the company's largest guru shareholder with 0.15% of outstanding shares followed by Pioneer Investments (Trades, Portfolio) with 0.05%, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates with 0.02% and Caxton Associates (Trades, Portfolio) with 0.01%.

Activision Blizzard Inc. (ATVI) is trading around $43 per share. The discounted cash flow calculator gives the stock a fair value of $55.59 per share, suggesting it has a 23% margin of safety at current prices.

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GuruFocus gave the provider of interactive entertainment content and services a profitability and growth rating of 9 out of 10. Its earnings per share have grown 3.40% over the past decade. Analysts project a three-year to five-year earnings growth rate of 7.58%. The return on equity of 17.55% and return on assets of 10.12% are outperforming 77% of companies in the Global Electronic Gaming and Multimedia industry.

Steve Mandel (Trades, Portfolio)’s Lone Pine Capital is the company's largest shareholder among the gurus with 2.05% of outstanding shares, followed by Philippe Laffont (Trades, Portfolio) with 1.18%, PRIMECAP Management (Trades, Portfolio) with 1.07% and the Sands Capital Management’s Frank Sands (Trades, Portfolio) with 0.80%.

FedEx Corp. (FDX) is trading around $179 per share. The discounted cash flow calculator gives the stock a fair value of $522.68 per share, suggesting it has a 66% margin of safety.

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The express courier delivery company has a GuruFocus profitability and growth rating of 8 out of 10. Its earnings per share have grown 15.80% over the past decade. Analysts project a three-year to five-year earnings growth rate of 9.86%. The return on equity of 26.45% and return on assets of 9.57% are outperforming 85% of companies in the Global Integrated Shipping and Logistics industry.

With 6.11% of outstanding shares, Dodge & Cox is the company's largest guru shareholder followed by PRIMECAP Management (Trades, Portfolio) with 5.77%, Bill Gates (Trades, Portfolio) with 1.16% and Mason Hawkins' (Trades, Portfolio) Southeastern Asset Management with 1.01%.

F5 Networks Inc. (FFIV) is trading around $151 per share. The discounted cash flow calculator gives the stock a fair value of $230 per share, suggesting it has a 30% margin of safety.

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The software-defined application services provider has a GuruFocus profitability and growth rating of 10 out of 10. Its earnings per share have grown 15.80% over the last 12 months. Analysts project a three-year to five-year earnings growth rate of 8.13%. The return on equity of 38.68% and return on assets of 18.98% are outperforming 92% of companies in the Global Software - Infrastructure industry.

The Simons’ firm is the company's largest guru shareholder with 4.16% of outstanding shares followed by Joel Greenblatt (Trades, Portfolio)’s Gotham Asset Management with 0.16% and Pioneer Investments (Trades, Portfolio) with 0.13%.

Fresenius Medical Care AG & Co. (FMS) is trading around $39 per share. The discounted cash flow calculator gives the stock a fair value of $54.97 per share, suggesting it has a 31% margin of safety.

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The kidney dialysis company has a GuruFocus profitability and growth rating of 8 out of 10. Its earnings per share have grown 180% over the last five years. Analysts project a three-year to five-year earnings growth rate of 7.50%. The return on equity of 18.48% and the return on assets of 7.93% are outperforming 63% of companies in the Global Medical Care industry.

With 0.04% of outstanding shares, Simons is the company's largest guru shareholder.

Gilead Sciences Inc. (GILD) is trading around $66 per share. The discounted cash flow calculator gives the stock a fair value of $118.71 per share, suggesting it has a 46% margin of safety.

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The biopharmaceutical company has a GuruFocus profitability and growth rating of 9 out of 10. Its earnings per share have grown 5.20% over the last five years. Analysts project a three-year to five-year earnings growth rate of 14.15%. The return on equity of 25.50% and return on assets of 8.29% are outperforming 83% of companies in the Global Biotechnology industry.

Dodge & Cox is the largest guru shareholder of the company with 1.30% of outstanding shares, followed by Simons with 0.42%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.28% and Pioneer Investments (Trades, Portfolio) with 0.26%.

Disclosure: I do not own any stocks mentioned.