20 Undervalued Companies, With a Track Record of Earnings Surprises

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Includes: AXL, BPI, CB, CMTL, EDMC, FFG, JAKK, KLIC, LINC, LUV, MIG, NNI, PL, QRVO, RBCAA, TER, UNH, UNTD, VSH, WDC
by: Kapitall

Do you prefer companies with a track record of releasing higher-than-expected earnings? If so, this list may be just up your alley.

Below we present 20 stocks that are undervalued relative to earnings growth (PEG less than 1) as well as free cash flow (P/FCF less than 10). These companies have also consistently beat analyst earnings estimates over the past year.



Are these companies in a position to keep surprising analysts? Use this list as a starting-off point for your own analysis. (Click here to access a complete analysis of historical earnings surprises)

List sorted by average quarterly surprise over the last year.

1. SanDisk Corp. (SNDK):
Semiconductor Industry. Market cap of $11.28B. PEG at 0.7. P/FCF at 8.39. The company has outperformed analyst earnings estimates by an average of 38.19% over the last year. The stock has gained 33.3% over the last year.

2. FBL Financial Group Inc. (NYSE:FFG): Life Insurance Industry. Market cap of $971.57M. PEG at 0.8. P/FCF at 1.93. The company has outperformed analyst earnings estimates by an average of 33.82% over the last year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.47). The stock has gained 22.03% over the last year.

3. JAKKS Pacific, Inc. (NASDAQ:JAKK): Toys & Games Industry. Market cap of $531.29M. PEG at 0.86. P/FCF at 9.51. The company has outperformed analyst earnings estimates by an average of 33.51% over the last year. The stock is a short squeeze candidate, with a short float at 15.35% (equivalent to 23.39 days of average volume). The stock has gained 40.4% over the last year.

4. Teradyne Inc. (NYSE:TER): Semiconductor Equipment & Materials Industry. Market cap of $3.41B. PEG at 0.69. P/FCF at 6.95. The company has outperformed analyst earnings estimates by an average of 31.50% over the last year. The stock has gained 58.35% over the last year.

5. Unitedhealth Group, Inc. (NYSE:UNH): Health Care Plans Industry. Market cap of $49.31B. PEG at 0.99. P/FCF at 9.63. The company has outperformed analyst earnings estimates by an average of 30.52% over the last year. The stock has gained 38.87% over the last year.

6. Comtech Telecommunications Corp. (NASDAQ:CMTL):
Communication Equipment Industry. Market cap of $766.80M. PEG at 0.34. P/FCF at 5.76. The company has outperformed analyst earnings estimates by an average of 27.31% over the last year. The stock is a short squeeze candidate, with a short float at 6.1% (equivalent to 5.65 days of average volume). The stock has had a couple of great days, gaining 6.25% over the last week.

7. Bridgepoint Education, Inc. (NYSE:BPI): Education & Training Services Industry. Market cap of $900.92M. PEG at 0.32. P/FCF at 5.51. The company has outperformed analyst earnings estimates by an average of 27.29% over the last year. Short float at 20.23% (equivalent to 23.84 days of average volume), indicating the stock is a short squeeze candidate. The stock has lost 30.69% over the last year.

8. Lincoln Educational Services Corporation (NASDAQ:LINC): Education & Training Services Industry. Market cap of $367.91M. PEG at 0.48. P/FCF at 5.1. The company has outperformed analyst earnings estimates by an average of 25.31% over the last year. Risk-averse investors may appreciate that LINC has a relatively low correlation to the market (beta = 0.73). The stock has lost 33.37% over the last year.

9. Vishay Intertechnology Inc. (NYSE:VSH): Semiconductor Industry. Market cap of $2.98B. PEG at 0.79. P/FCF at 7.45. The company has outperformed analyst earnings estimates by an average of 22.33% over the last year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.14). The stock is a short squeeze candidate, with a short float at 9.81% (equivalent to 6.5 days of average volume).

10. Nelnet Inc. (NYSE:NNI): Credit Services Industry. Market cap of $1.07B. PEG at 0.39. P/FCF at 7.24. The company has outperformed analyst earnings estimates by an average of 22.10% over the last year. The stock has gained 16.14% over the last year.

11. Republic Bancorp Inc. (NASDAQ:RBCAA): Regional Bank. Market cap of $450.63M. PEG at 0.69. P/FCF at 6.12. The company has outperformed analyst earnings estimates by an average of 22.05% over the last year. The stock has had a couple of great days, gaining 12.32% over the last week.

12. American Axle & Manufacturing Holdings Inc. (NYSE:AXL):
Auto Parts Industry. Market cap of $929.96M. PEG at 0.48. P/FCF at 7.49. The company has outperformed analyst earnings estimates by an average of 21.76% over the last year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.43). The stock has gained 18.86% over the last year.

13. Kulicke & Soffa Industries Inc. (NASDAQ:KLIC):
Semiconductor Equipment & Materials Industry. Market cap of $649.83M. PEG at 0.35. P/FCF at 9.41. The company has outperformed analyst earnings estimates by an average of 18.25% over the last year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.75). The stock has gained 20.05% over the last year.

14. Education Management Corporation (NASDAQ:EDMC): Education & Training Services Industry. Market cap of $1.68B. PEG at 0.84. P/FCF at 8.13. The company has outperformed analyst earnings estimates by an average of 18.02% over the last year. Short float at 6.94% (equivalent to 19.8 days of average volume), indicating the stock is a short squeeze candidate. EDMC is exhibiting strong upside momentum--currently trading 12.81% above its SMA20, 16.23% above its SMA50, and 50.61% above its SMA200. The stock has had a couple of great days, gaining 10.2% over the last week.

15. RF Micro Devices Inc. (RFMD):
Semiconductor Industry. Market cap of $1.75B. PEG at 0.92. P/FCF at 8.3. The company has outperformed analyst earnings estimates by an average of 17.95% over the last year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.5). The stock has gained 23.11% over the last year.

16. Protective Life Corp. (NYSE:PL): Life Insurance Industry. Market cap of $2.51B. PEG at 0.87. P/FCF at 3.84. The company has outperformed analyst earnings estimates by an average of 16.55% over the last year. This stock is significantly more volatile than the overall market (beta = 3), indicating its risk. The stock has gained 17.75% over the last year.

17. Meadowbrook Insurance Group Inc. (NYSE:MIG): Property & Casualty Insurance Industry. Market cap of $555.93M. PEG at 0.95. P/FCF at 3.4. The company has outperformed analyst earnings estimates by an average of 15.13% over the last year. The stock has gained 33.33% over the last year.

18. Southwest Airlines Co. (NYSE:LUV): Regional Airlines Industry. Market cap of $9.12B. PEG at 0.96. P/FCF at 8.64. The company has outperformed analyst earnings estimates by an average of 14.91% over the last year. The stock has lost 8.13% over the last year.

19. United Online, Inc. (NASDAQ:UNTD): Specialty Retail Industry. Market cap of $565.02M. PEG at 0.74. P/FCF at 7.55. The company has outperformed analyst earnings estimates by an average of 13.44% over the last year. The stock has had a good month, gaining 10.69%.

20. The Chubb Corporation (NYSE:CB): Property & Casualty Insurance Industry. Market cap of $18.14B. PEG at 0.96. P/FCF at 9.94. The company has outperformed analyst earnings estimates by an average of 12.67% over the last year. The stock has gained 23.28% over the last year.

*Surprise data sourced from Daily 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.