Interested in finding potentially undervalued stocks? If so, one idea is to search for companies trading at the steepest discounts to their analyst target prices.
We ran a screen on large-cap companies (market caps above $10 billion) for those trading at steep discounts to even their lowest analyst target prices.
Because target prices tend to be inflated due to analyst bullishness, we only considered the lowest, most pessimistic analyst target price. Also, to only consider companies with sufficient coverage, we included those with 5 or more target prices.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
1. Barrick Gold Corporation (NYSE:ABX): Engages in the production and sale of gold, as well as related activities, such as exploration and mine development. Market cap at $34.18B, most recent closing price at $34.14. Of the analysts that have set a target price on the stock, the lowest price target stands at $41. This implies a potential upside of 19% from current levels around $34.25.
2. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational and business information markets worldwide. Market cap at $14.92B, most recent closing price at $53.71. Of the analysts that have set a target price on the stock, the lowest price target stands at $62. This implies a potential upside of 15% from current levels around $53.87.
3. The Mosaic Company (NYSE:MOS): Engages in the production and marketing of concentrated phosphate- and potash-based crop nutrients for the agriculture industry worldwide. Market cap at $25.11B, most recent closing price at $58.99. Of the analysts that have set a target price on the stock, the lowest price target stands at $72. This implies a potential upside of 20.52% from current levels around $59.74
*Target price data sourced from Yahoo! Finance, all other data sourced from Finviz.
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.