Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

The following is a list of companies that have been more profitable than their competitors over the past 5 years, based on average gross and net profit margins. In addition, all of these stocks have PEG ratios below 1.0, which usually signal undervalued conditions.

These companies are trading at attractive valuations, based on their past performance and current PEG ratios. This list might offer an interesting starting point for value investors. Full details below...

Profitability data sourced from Reuters, short float and performance data sourced from Finviz.

click for expanded image

The list has been sorted by an average rank of the net profit and gross profit margins.

1. Ensco plc (ESV): Oil & Gas Drilling & Exploration Industry. Market cap of $7.09B. PEG ratio at 0.87. 5-year average gross margin at 65.87% vs. industry average at 19.14%. 5-year average net profit margin at 42.61% vs. industry average at 10.47%. Short float at 4.52%, which implies a short ratio of 3.75 days. The stock has gained 21.56% over the last year.

2. Shengdatech, Inc. (OTC:SDTH): Specialty Chemicals Industry. Market cap of $323.03M. PEG ratio at 0.85. 5-year average gross margin at 37.21% vs. industry average at 18.63%. 5-year average net profit margin at 26.28% vs. industry average at 6.59%. Short float at 3.14%, which implies a short ratio of 5.36 days. The stock has lost -3.09% over the last year.

3. Noble Corp. (NE): Oil & Gas Drilling & Exploration Industry. Market cap of $8.7B. PEG ratio at 0.69. 5-year average gross margin at 62.94% vs. industry average at 19.14%. 5-year average net profit margin at 40.36% vs. industry average at 10.47%. Short float at 1.97%, which implies a short ratio of 1.24 days. The stock has lost -13.28% over the last year.

4. Netease.com Inc. (NTES): Internet Software & Services Industry. Market cap of $4.99B. PEG ratio at 0.89. 5-year average gross margin at 79.86% vs. industry average at 43.96%. 5-year average net profit margin at 52.99% vs. industry average at 16.79%. Short float at 3.12%, which implies a short ratio of 2.7 days. The stock has gained 4.38% over the last year.

5. Perfect World Co., Ltd. (PWRD): Application Software Industry. Market cap of $1.2B. PEG ratio at 0.53. 5-year average gross margin at 85.84% vs. industry average at 43.96%. 5-year average net profit margin at 45.51% vs. industry average at 16.79%. Short float at 4.88%, which implies a short ratio of 2.85 days. The stock has lost -44.68% over the last year.

6. Cresud Inc. (CRESY): Farm Products Industry. Market cap of $939.07M. PEG ratio at 0.95. 5-year average gross margin at 40.39% vs. industry average at 25.4%. 5-year average net profit margin at 17.92% vs. industry average at 7.37%. Short float at 0.69%, which implies a short ratio of 1.42 days. The stock has gained 35.46% over the last year.

7. Sasol Ltd. (SSL): Major Integrated Oil & Gas Industry. Market cap of $31.54B. PEG ratio at 0.97. 5-year average gross margin at 38.5% vs. industry average at 18.63%. 5-year average net profit margin at 14.33% vs. industry average at 6.59%. Short float at 0.1%, which implies a short ratio of 2.57 days. The stock has gained 25.41% over the last year.

8. Southern Copper Corp. (SCCO): Copper Industry. Market cap of $39.57B. PEG ratio at 0.81. 5-year average gross margin at 59.61% vs. industry average at 41.6%. 5-year average net profit margin at 33.18% vs. industry average at 15.39%. Short float at 4.08%, which implies a short ratio of 3.25 days. The stock has gained 47.26% over the last year.

9. Intevac Inc. (IVAC): Diversified Electronics Industry. Market cap of $332.11M. PEG ratio at 0.83. 5-year average gross margin at 39.52% vs. industry average at 13.93%. 5-year average net profit margin at 8.08% vs. industry average at 4.15%. Short float at 6.56%, which implies a short ratio of 10.45 days. The stock has gained 19.26% over the last year.

10. Methanex Corp. (MEOH): Specialty Chemicals Industry. Market cap of $2.76B. PEG ratio at 0.65. 5-year average gross margin at 25.24% vs. industry average at 18.63%. 5-year average net profit margin at 12.49% vs. industry average at 6.59%. Short float at 1.1%, which implies a short ratio of 3.09 days. The stock has gained 56.11% over the last year.

11. Concho Resources, Inc. (CXO): Oil & Gas Drilling & Exploration Industry. Market cap of $8.68B. PEG ratio at 0.70. 5-year average gross margin at 81.17% vs. industry average at 43.11%. 5-year average net profit margin at 19.43% vs. industry average at 11.05%. Short float at 5.07%, which implies a short ratio of 5.44 days. The stock has gained 110.52% over the last year.

12. BHP Billiton plc (BBL): Industrial Metals & Minerals Industry. Market cap of $215.51B. PEG ratio at 0.99. 5-year average gross margin at 75.9% vs. industry average at 41.6%. 5-year average net profit margin at 23.83% vs. industry average at 15.39%. Short float at 0.07%, which implies a short ratio of 1.2 days. The stock has gained 28.3% over the last year.

13. Olin Corp. (OLN): Chemicals Industry. Market cap of $1.57B. PEG ratio at 0.77. 5-year average gross margin at 22.2% vs. industry average at 18.63%. 5-year average net profit margin at 9.68% vs. industry average at 6.59%. Short float at 7.7%, which implies a short ratio of 7.8 days. The stock has gained 21.03% over the last year.

14. Agilent Technologies Inc. (A): Scientific & Technical Instruments Industry. Market cap of $13.B. PEG ratio at 0.66. 5-year average gross margin at 53.83% vs. industry average at 31.67%. 5-year average net profit margin at 9.43% vs. industry average at 6.84%. Short float at 1.26%, which implies a short ratio of 1.38 days. The stock has gained 25.77% over the last year.

15. Ares Capital Corporation (ARCC): Diversified Investments Industry. Market cap of $3.22B. PEG ratio at 0.52. 5-year average gross margin at 73.78% vs. industry average at 2.52%. 5-year average net profit margin at 31.75% vs. industry average at 27.25%. Short float at 1.78%, which implies a short ratio of 2.4 days. The stock has gained 46.67% over the last year.

16. Southwestern Energy Co. (SWN): Independent Oil & Gas Industry. Market cap of $12.8B. PEG ratio at 0.93. 5-year average gross margin at 62.79% vs. industry average at 36.48%. 5-year average net profit margin at 14.92% vs. industry average at 13.1%. Short float at 3.14%, which implies a short ratio of 2.33 days. The stock has lost -14% over the last year.

17. Millicom International Cellular SA (MICC): Telecom Services Industry. Market cap of $9.66B. PEG ratio at 0.44. 5-year average gross margin at 63.57% vs. industry average at 54.51%. 5-year average net profit margin at 14.78% vs. industry average at 13.23%. Short float at 1.81%, which implies a short ratio of 2.45 days. The stock has gained 18.82% over the last year.

18. Honda Motor Co., Ltd. (HMC): Auto Manufacturers Industry. Market cap of $66.99B. PEG ratio at 0.37. 5-year average gross margin at 27.79% vs. industry average at 21.62%. 5-year average net profit margin at 3.43% vs. industry average at 3.26%. Short float at 0.02%, which implies a short ratio of 0.82 days. The stock has gained 10.07% over the last year.

19. TriQuint Semiconductor, Inc. (TQNT): Semiconductor Industry. Market cap of $2.08B. PEG ratio at 0.73. 5-year average gross margin at 31.42% vs. industry average at 23.1%. 5-year average net profit margin at 1.77% vs. industry average at -0.78%. Short float at 7.06%, which implies a short ratio of 2.57 days. The stock has gained 111.71% over the last year.

20. Southwest Airlines Co. (LUV): Regional Airlines Industry. Market cap of $9.67B. PEG ratio at 0.77. 5-year average gross margin at 23.89% vs. industry average at 20.35%. 5-year average net profit margin at 3.98% vs. industry average at -0.44%. Short float at 2.66%, which implies a short ratio of 3.38 days. The stock has gained 28.47% over the last year.

Source: 20 Profitable Stocks With Low PEG Ratios