Interested in finding undervalued stocks? For ideas on where to look, we ran a screen you might be interested in.
We screened the S&P 500 index for stocks that appear undervalued relative to EPS trends. Based on the theoretical assumption that if P/E is equal to a constant K, growth in EPS estimates should be matched by proportionate growth in price. When they don't match up, a mispricing may have occurred. We screened for those exhibiting this mismatch between changes in EPS estimate and price.
Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
1. Abercrombie & Fitch Co. (NYSE:ANF): Operates as a specialty retailer of casual apparel for men, women, and kids. Market cap at $3.67B, most recent closing price at $47.97. The EPS estimate for the company's current year increased from 2.53 to 2.96 over the last 30 days, an increase of 17.%. This increase came during a time when the stock price changed by 12.05% (from 41.75 to 46.78 over the last 30 days).
3. Cabot Oil & Gas Corporation (NYSE:COG): Engages in oil exploration, development, exploitation, and production. Market cap at $10.46B, most recent closing price at $49.74. The EPS estimate for the company's current year increased from 0.6 to 0.63 over the last 30 days, an increase of 5.%. This increase came during a time when the stock price changed by -2.46% (from 47.97 to 46.79 over the last 30 days).
3. EOG Resources, Inc. (NYSE:EOG): Engages in the exploration, development, production, and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad, Tobago, the United Kingdom, and the People's Republic of China. Market cap at $32.95B, most recent closing price at $120.79. The EPS estimate for the company's current year increased from 5.19 to 5.45 over the last 30 days, an increase of 5.01%. This increase came during a time when the stock price changed by 1.99% (from 116.67 to 118.99 over the last 30 days).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.