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Tiziano Frateschi
Tiziano Frateschi
Articles (2477)  | Author's Website |

6 Undervalued Stocks According to the Peter Lynch Value

Rio Tinto, Micron make the list

November 13, 2019 | About:

Several gurus are focusing on stocks whose Peter Lynch fair values are above their current prices, according to the GuruFocus All-in-One Screener. As of Wednesday, the following companies are trading with wide margins of safety and have had positive performances over the last 12 months.

Rio Tinto PLC

Rio Tinto PLC (RIO) is trading around $52.30 per share. The Peter Lynch value gives the stock a fair price of $200.56, which suggests it is undervalued with a 74% margin of safety. Over the past three months, the stock has registered a positive performance of 9.43%.

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The company has a market cap of $89.99 billion and an enterprise value of $100.59 billion.

The stock is trading with a price-earnings ratio of 6.56, which is higher than 74% of companies in the metals and mining industry. The share price is 18% below its 52-week high and 19% above its 52-week low. The price-book ratio is 1.70.

The company's largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.65% of outstanding shares, followed by Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.03%.

VMware Inc. 

VMware Inc. (VMW) is trading around $168 per share. The Peter Lynch value gives the stock a fair price of $370.3, which suggests it is undervalued with a 46% margin of safety. The stock registered a positive three-month performance of 5.23%.

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The company, which provides server and desktop virtualization software, has a market cap of $67.72 billion and an enterprise value of $69.61 billion.

The stock is trading with a price-earnings ratio of 11.02, which is higher than 84% of companies in the software industry. The share price is currently 19.86% below its 52-week high and 28.78% above its 52-week low. The price-book ratio is 13.28.

Simons’ firm is the company's largest guru shareholder with 0.94% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 0.30% and Pioneer Investments (Trades, Portfolio) with 0.01%.

Biogen Inc.

Biogen Inc. (BIIB) is trading around $291 per share. The Peter Lynch value gives the stock a fair price of $427.14, which suggests it is undervalued with a 31% margin of safety. Over the past three months, the stock has risen 24.74%.

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The company has a market cap of $53.08 billion and an enterprise value of $55.0 billion.

The stock is trading with a price-earnings ratio of 10.46, which is higher than 83% of companies in the drug manufacturers industry. The share price is currently 14.49% below its 52-week high and 36.32% above its 52-week low. The price-book ratio is 3.87.

The company's largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 7.38% of outstanding shares, followed by Vanguard Health Care Fund (Trades, Portfolio) with 01.38% and the Simons’ firm with 1.26%.

Micron Technology Inc.

Micron Technology Inc. (MU) is trading around $46.26 per share. The Peter Lynch value gives the stock a fair price of $136.50, which suggests it is undervalued with a 66% margin of safety. Over the past three months, the stock has registered a positive performance of 11.42%.

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The company has a market cap of $51.21 billion and an enterprise value of $50.0 billion.

The stock is trading with a price-earnings ratio of 8.47, which is higher than 88% of companies in the semiconductors industry. The share price is currently 9.98% below its 52-week high and 62.94% above its 52-week low. The price-book ratio is 1.45.

PRIMECAP Management (Trades, Portfolio) is the company's largest guru shareholder with 5.23% of outstanding shares, followed by the Simons’ firm with 0.88% and Andreas Halvorsen (Trades, Portfolio)’s Viking Global Investors with 0.58%.

Lam Research Corp

Lam Research Corp. (LRCX) is trading around $270 per share. The Peter Lynch value gives the stock a fair price of $339.50, which suggests it is undervalued with a 20% margin of safety. Over the past three months, the stock has risen 39.47%.

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The company, which provides equipment used to fabricate semiconductors, has a market cap of $39.35 billion and an enterprise value of $38.2 billion.

The stock is trading with a price-earnings ratio of 19.97, which is higher than 52% of companies in the semiconductors industry. The share price is 4.11% below its 52-week high and 121.18% above its 52-week low. The price-book ratio is 8.21.

The company's largest guru shareholder is Pioneer Investments (Trades, Portfolio) with 0.70% of outstanding shares, followed by Parnassus Endeavor Fund (Trades, Portfolio) with 0.66%, Joel Greenblatt (Trades, Portfolio) ’s Gotham Asset Management with 0.12% and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates with 0.04%.

Ecopetrol SA

Ecopetrol SA (EC) is trading around $18 per share. The Peter Lynch value gives the stock a fair price of $45.55, which suggests it is undervalued with a 58% margin of safety. Over the past three months, the stock has registered a positive performance of 13.60%.

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The vertically integrated oil company has a market cap of $38.98 billion and an enterprise value of $48.14 billion.

The stock is trading with a price-earnings ratio of 10.41, which is higher than 51% of companies in the oil and gas industry. The share price is currently 18.42% below its 52-week high and 24.65% above its 52-week low. The price-book ratio is 2.1.

Simons’ firm is the company's largest guru shareholder with 0.33% of outstanding shares, followed by Barrow, Hanley, Mewhinney & Strauss with 0.15%, Fisher with 0.10% and Steven Cohen (Trades, Portfolio)’s Point72 Asset Management with 0.02%.

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

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About the author:

Tiziano Frateschi
You can read about me on www.theextraincome.info, which gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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