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If you’re looking for momentum ideas that offer good value, using the Levered Free Cashlow / Enterprise Value (LFCF/EV) ratio on rallying stocks might offer an interesting starting place for your analysis.

To create this list we took all stocks rallying above the 20-day MA, 50-day MA, and 200-day MA. The resulting 184 stocks were further analyzed to find those with the most undervalued market price by the LFCF/EV ratio. The top 15 results are outlined below.



Do you think these stocks will continue to rally? Full details below.

1. WellCare Health Plans, Inc. (WCG): Health Care Plans Industry. Market cap of $2.05B. Levered Free Cast Flow at 221.55M, vs Enterprise Value at 583.07M (implies a LFCF/EV ratio at 38%). The stock has had a good month, gaining 14.04%.

2. Intersections Inc. (INTX): Consumer Services Industry. Market cap of $260.76M. Levered Free Cast Flow at 84.02M, vs Enterprise Value at 260.53M (implies a LFCF/EV ratio at 32.25%). The stock has had a couple of great days, gaining 8.08% over the last week.

3. P&F Industries Inc. (PFIN): Small Tools & Accessories Industry. Market cap of $15.99M. Levered Free Cast Flow at 10.10M, vs Enterprise Value at 32.51M (implies a LFCF/EV ratio at 31.07%). Exhibiting strong upside momentum--currently trading 6.15% above its SMA20, 13.9% above its SMA50, and 47.34% above its SMA200. The stock has had a good month, gaining 15.36%.

4. TeleNav, Inc. (TNAV): Communication Equipment Industry. Market cap of $650.05M. Levered Free Cast Flow at 119.37M, vs Enterprise Value at 438.80M (implies a LFCF/EV ratio at 27.2%). The stock has had a good month, gaining 43.13%.

5. CVD Equipment Corp. (CVV): Diversified Machinery Industry. Market cap of $56.05M. Levered Free Cast Flow at 8.82M, vs Enterprise Value at 48.89M (implies a LFCF/EV ratio at 18.04%). The stock has had a good month, gaining 16.27%.

6. Vivo Participacoes S.A. (VIV): Wireless Communications Industry. Market cap of $17.48B. Levered Free Cast Flow at 3.16B, vs Enterprise Value at 18.42B (implies a LFCF/EV ratio at 17.16%). Exhibiting strong upside momentum--currently trading 6.34% above its SMA20, 10.66% above its SMA50, and 40.61% above its SMA200. The stock has gained 78.62% over the last year.

7. Nature's Sunshine Products Inc. (NATR): Drug Related Products Industry. Market cap of $176.50M. Levered Free Cast Flow at 19.16M, vs Enterprise Value at 115.56M (implies a LFCF/EV ratio at 16.58%). The stock is a short squeeze candidate, with a short float at 5.7% (equivalent to 36.73 days of average volume).

8. Kulicke & Soffa Industries Inc. (KLIC): Semiconductor Equipment & Materials Industry. Market cap of $834.48M. Levered Free Cast Flow at 89.43M, vs Enterprise Value at 654.40M (implies a LFCF/EV ratio at 13.67%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.67). The stock has had a good month, gaining 28.78%.

9. Nobel Learning Communities Inc. (NLCI): Education & Training Services Industry. Market cap of $122.02M. Levered Free Cast Flow at 16.00M, vs Enterprise Value at 136.99M (implies a LFCF/EV ratio at 11.68%). Exhibiting strong upside momentum--currently trading 11.72% above its SMA20, 15.18% above its SMA50, and 44.73% above its SMA200. The stock has had a good month, gaining 15.%.

10. Alto Palermo S.A. (APSA): Property Management Industry. Market cap of $368.52M. Levered Free Cast Flow at 82.36M, vs Enterprise Value at 800.15M (implies a LFCF/EV ratio at 10.29%). Exhibiting strong upside momentum--currently trading 13.89% above its SMA20, 27.6% above its SMA50, and 48.09% above its SMA200. The stock has had a good month, gaining 25.25%.

11. Dillard's Inc. (DDS): Department Stores Industry. Market cap of $3.12B. Levered Free Cast Flow at 391.90M, vs Enterprise Value at 3.81B (implies a LFCF/EV ratio at 10.29%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.55). The stock is a short squeeze candidate, with a short float at 36.39% (equivalent to 9.81 days of average volume).

12. Top Image Systems Ltd. (TISA): Computer Peripherals Industry. Market cap of $22.04M. Levered Free Cast Flow at 2.79M, vs Enterprise Value at 27.16M (implies a LFCF/EV ratio at 10.27%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.75).

13. Delek US Holdings Inc. (DK): Oil & Gas Refining & Marketing Industry. Market cap of $832.61M. Levered Free Cast Flow at 102.55M, vs Enterprise Value at 999.54M (implies a LFCF/EV ratio at 10.26%). The stock has gained 127.29% over the last year.

14. Frontier Oil Corp. (FTO):
Oil & Gas Refining & Marketing Industry. Market cap of $3.11B. Levered Free Cast Flow at 258.78M, vs Enterprise Value at 2.78B (implies a LFCF/EV ratio at 9.31%). The stock has gained 120.75% over the last year.

15. Cubist Pharmaceuticals Inc. (CBST): Drug Manufacturers Industry. Market cap of $2.20B. Levered Free Cast Flow at 152.33M, vs Enterprise Value at 1.74B (implies a LFCF/EV ratio at 8.75%). The stock is a short squeeze candidate, with a short float at 12.42% (equivalent to 5.08 days of average volume). Exhibiting strong upside momentum--currently trading 9.43% above its SMA20, 23.3% above its SMA50, and 54.19% above its SMA200. The stock has gained 82.16% over the last year.

*Levered free cashflow data sourced from Yahoo Finance, rest of 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.

Source: 15 Rallying Stocks Undervalued by Enterprise Value