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

If you are a value investor looking for momentum ideas, then this may be an interesting starting point for your own analysis.

To construct this list we found all U.S stocks reaching new 52-week highs during recent sessions. We then focused on those with high levered free cash flow relative to enterprise value, LFCF/EV ratio. The top 10 results are outlined below.

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. Note: The numbers on top of items represent the forward P/E ratio, if available.


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Considering that these companies have significant levered free cash-flow relative to enterprise value, do you consider them to be undervalued? Which of these stocks would you classify as compelling buys?

1. Icahn Enterprises, L.P. (NASDAQ:IEP): Property Management Industry. Market cap of $3.64B. Levered Free Cast Flow at $2.26B, vs Enterprise Value at $8.14B (implies a LFCF/EV ratio at 27.76%). Exhibiting strong upside momentum--currently trading 16.8% above its SMA20, 18.29% above its SMA50, and 26.58% above its SMA200. The stock has had a couple of great days, gaining 6.24% over the last week.

2. HCC Insurance Holdings Inc. (NYSE:HCC)
: Property & Casualty Insurance Industry. Market cap of $3.73B. Levered Free Cast Flow at $685.83M, vs Enterprise Value at $3.68B (implies a LFCF/EV ratio at 18.64%). Relatively low correlation to the market (beta = 0.68), which may be appealing to risk averse investors. The stock has gained 33.47% over the last year.

3. CIGNA Corporation (NYSE:CI):
Health Care Plans Industry. Market cap of $13.39B. Levered Free Cast Flow at $2.41B, vs Enterprise Value at $14.79B (implies a LFCF/EV ratio at 16.29%). Might be undervalued at current levels, with a PEG ratio at 0.91, and P/FCF ratio at 12.41. The stock has gained 47.94% over the last year.

4. Primoris Services Corporation (NASDAQ:PRIM): Heavy Construction Industry. Market cap of $642.08M. Levered Free Cast Flow at $86.52M, vs Enterprise Value at $577.18M (implies a LFCF/EV ratio at 14.99%). The stock has had a couple of great days, gaining 5.89% over the last week.

5. Northrop Grumman Corporation (NYSE:NOC): Conglomerate. Market cap of $18.99B. Levered Free Cast Flow at $2.55B, vs Enterprise Value at $18.88B (implies a LFCF/EV ratio at 13.51%). Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.08%, current ratio at 1.47, and quick ratio at 1.33. The stock is a short squeeze candidate, with a short float at 9.16% (equivalent to 12.88 days of average volume). The stock has gained 21.97% over the last year.

6. CF Industries Holdings, Inc. (NYSE:CF): Agricultural Chemicals Industry. Market cap of $11.09B. Levered Free Cast Flow at $1.54B, vs Enterprise Value at $11.57B (implies a LFCF/EV ratio at 13.31%). Exhibiting strong upside momentum--currently trading 9.88% above its SMA20, 12.54% above its SMA50, and 23.71% above its SMA200. The stock has had a couple of great days, gaining 11.6% over the last week.

7. ProAssurance Corporation (NYSE:PRA): Property & Casualty Insurance Industry. Market cap of $2.13B. Levered Free Cast Flow at $244.87M, vs Enterprise Value at $1.94B (implies a LFCF/EV ratio at 12.62%). The stock has gained 18.18% over the last year.

8. Humana Inc. (NYSE:HUM)
: Health Care Plans Industry. Market cap of $13.37B. Levered Free Cast Flow at $744.60M, vs Enterprise Value at $6.15B (implies a LFCF/EV ratio at 12.11%). The stock has gained 72.42% over the last year.

9. PH Glatfelter Co. (NYSE:GLT): Paper & Paper Products Industry. Market cap of $686.92M. Levered Free Cast Flow at $105.65M, vs Enterprise Value at $904.05M (implies a LFCF/EV ratio at 11.69%). The stock is a short squeeze candidate, with a short float at 6.61% (equivalent to 9.79 days of average volume).

10. Ashland Inc. (NYSE:ASH): Chemicals Industry. Market cap of $4.84B. Levered Free Cast Flow at $491.75M, vs Enterprise Value at $4.62B (implies a LFCF/EV ratio at 10.64%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.8). Exhibiting strong upside momentum--currently trading 9.44% above its SMA20, 12.71% above its SMA50, and 23.33% above its SMA200. The stock has gained 15.16% over the last year.

*Enterprise value and levered free cashflow 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.

Source: 10 Stocks Reaching New Highs, With Attractive Valuations Relative to Enterprise Value