Lists of stocks making 52-week lows can be great for generating investment ideas, as long as you're patient and willing to sort through a lot of bad stocks.
Luckily, I've done a lot of the hard work for you. I've powered through a recent 52-week low list and have dug up two undervalued companies that deserve a second look. These are also both companies that have been overlooked by Wall Street. Each of these stocks are undervalued according to a discounted cash flow valuation, using a 15% discount rate. For more details on valuations, please see the 'Statistics and Calculations' section of my FAQ.
Stocks are ranked in order of their Vuru Grade, which ranks stocks based on the quality of the company and its valuation. It has consistently outperformed the market over the past 3, 5, and 10 year periods.
We hope you'll use this list as a starting point for your analysis:
1. Lexmark International Inc. (NYSE:LXK)
Lexmark develops, manufactures and supplies printing and imaging, document workflow and content management solutions for the office. The company operates in the office imaging and enterprise content management markets.
Lexmark recently missed analyst estimates and lowered guidance for the next quarter, and the company was harshly punished for it.
But LXK has good fundamentals and deserves another look. This is especially so because the low-end supply of printer hardware and supplies is becoming a smaller and smaller piece of its business, and it's undervalued:
Growth Price (DCF): $37.67
Current Price: $30.01
LXK is undervalued by 25.54%
LXK's Vuru Grade: 74.30/100. Find the full report here: Vuru's LXK Report.
2. Smith Micro Software Inc. (NASDAQ:SMSI)
Smith Micro designs, develops and markets software products and services for the mobile computing and communications industries. The company is focused on developing connectivity, communications, and content management solutions for wireless and wired networks.
Like Lexmark, SMSI also missed analyst estimates and was harshly punished for it.
But it too has strong fundamentals. Smith Micro has an extremely healthy balance sheet with more cash than its total liabilities and its delivered positive free cash flow for 8 of the past 10 years. More interestingly, the FCF seems to be on an upward trend.
Growth Price (DCF): $9.39
Current Price: $5.14
SMSI is undervalued by 82.69%
SMSI's Vuru Grade: 71.21/100. Find the full report here: Vuru's SMSI Report.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.