These six stocks have positive catalysts for future growth, price to book ratios of less than one, quarterly revenue growth of 10% or greater, and PEG ratios of less than 1. The PEG ratio is a broadly-used indicator of a stock's prospective worth. It is preferred by numerous analysts over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued. Many financiers use 1 as the cut-off point for PEG ratios. A PEG of 1 or less is believed to be favorable. As Warren Buffett would say, "Price is what you pay, value is what you get."
These are bullish indicators regarding a stock's possible future performance. Moreover, these stocks are trading well below consensus analysts’ estimates; several have recent upgrades and positive analyst comments. Nonetheless, this is only the first step in finding winners for your portfolio. Now that we have cut the wheat from the chaff, let's take a closer look to distinguish the driving factors behind these remarkable statistics and ensure the stories are intact.
Below are four tables with detailed statistics regarding company summaries, price performance, fundamentals and earnings and dividends followed by a brief review of each company, a summary of current analysts' estimates and up/downgrade activity followed by a chart of the company's key statistics.
Micron Technology, Inc. (MU), together with its subsidiaries, engages in the manufacture and marketing of semiconductor devices worldwide.
Micron recently announced a new portfolio of PCI Express (PCIe) solid-state storage systems, the RealSSD™ P320h solid-state drive (SSD) series. This new RealSSD P320h series delivers extreme performance and endurance demanded by data-intensive enterprise applications including cloud computing, high-performance computing, data analytics, business intelligence, and video on demand. These new forms of data storing, accessing and sharing are quickly challenging the typical enterprise storage model of spinning disks, presenting great opportunity for PCIe SSDs.
"Micron is defining a whole new category of enterprise-class storage with our P320h PCIe solid-state storage systems," said Gary Gentry, general manager, enterprise division, Micron's NAND solutions group. "The P320h provides customers with the most compelling performance solution in the industry."
The company is trading significantly below analysts' estimates. MU has a median price target of $14 by 21 brokers and a high target of $18. The last up/downgrade activity was on Jan. 25, when Avian downgraded the company from Neutral to Negative. Please review the illustration for MU's summary and key statistics.
The Nasdaq OMX Group, Inc. (NDAQ) provides trading, clearing, exchange technology, securities listing, and public company services worldwide.
NDAQ has been recognized as the best data provider among the world's securities exchanges. Additionally, Nasdaq Basic has been recognized as the Best New Data Product of the Year. These recognitions of excellence were announced recently at the eighth annual Inside Market Data Awards in New York. Nasdaq's acknowledgements as a world-class data provider and developer of the best new product were determined by the readership of Inside Market Data, a key publication for senior level data and technology executives within the financial services and securities industries throughout the world.
"We are thrilled to have been recognized by our customers, prospects, and distribution partners," said Randall Hopkins, senior vice president, Nasdaq OMX Global Data Products. "Our team is dedicated to providing services and products of the highest quality so that we can continue to meet the growing demands of traders, investors and data distributors across the globe."
The company is trading significantly below analysts' estimates. NDAQ has a median price target of $29 by 18 brokers and a high target of $34. The last up/downgrade activity was on June 9, when Stifel Nicolaus upgraded the company from Hold to Buy. Please review the illustration for NDAQ's summary and key statistics.
Prudential Financial, Inc. (PRU), through its subsidiaries, offers various financial products and services in the United States, Asia, Europe, and Latin America.
Prudential recently announced that it is instituting a share repurchase program and has authorized the repurchase of up to $1.5 billion of its outstanding common stock through June 30, 2012 under the program.
Management will determine the timing and amount of any share repurchases under the share repurchase authorization based on market conditions and other considerations. The repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended.
The company is trading significantly below analysts' estimates. PRU has a median price target of $75 by 17 brokers and a high target of $90. The last up/downgrade activity was on Apr. 18, when Barclays Capital initiated coverage on the company with an Overweight rating. Please review the illustration for PRU's summary and key statistics.
Reinsurance Group of America, Incorporated (RGA), an insurance holding company, engages in individual and group life, annuity, asset-intensive, critical illness, and financial reinsurance in the United States, Canada, Europe, South Africa, and the Asia Pacific.
RGA recently reported first-quarter net income of $160.8 million, or $2.18 per diluted share, compared to $122.4 million, or $1.64 per diluted share in the prior-year quarter. Operating income totaled $118.8 million, or $1.61 per diluted share, compared to $93.0 million, or $1.25 per diluted share in the year-ago quarter. Operating income per diluted share increased 29 percent over the year-ago quarter.
A. Greig Woodring, president and chief executive officer, commented:
RGA's first quarter of 2011 was eventful on several fronts as it included capital refinement activity, natural disasters in the Asia Pacific region and RGA's first investor day conference. As outlined at that conference, we executed several capital refinement strategies, including redeeming a convertible security and purchasing 5.5 million shares, which collectively lowered shareholders' equity by approximately $178 million and our diluted share count by roughly 1.9 million shares. Our capital and liquidity positions remain strong, and our investment portfolio is appropriately positioned. Investment impairments were not material this quarter.
The company is trading significantly below analysts' estimates. RGA has a median price target of $73 by seven brokers and a high target of $76. The last up/downgrade activity was on Aug. 5, 2009 when Credit Suisse initiated coverage on the company with an Outperform rating. Please review the illustration for RGA's summary and key statistics.
Tech Data Corporation (TECD) distributes information technology products, as well as offers logistics management and other value-added services in North America, South America, and Europe.
Tech Data recently announced that its board of directors has approved a $100 million increase to its existing share repurchase program announced in March, resulting in a total share repurchase authorization of $200 million. Through May 31, the company repurchased approximately 1,542,000 shares of common stock at a cost of $75.7 million. Since 2005, the company has purchased $675 million of Tech Data stock, buying back 17.7 million shares to date.
"The increase to our current share repurchase program reflects the company's strong financial performance and our confidence in its long-term growth prospects," said Robert M. Dutkowsky, chief executive officer, Tech Data Corporation. "Our healthy balance sheet and ample liquidity provide us the opportunity to continue to invest in growing our business, both organically and through acquisitions, while also creating value for our shareholders through share repurchases."
The company is trading significantly below analysts' estimates. TECD has a median price target of $55 by seven brokers and a high target of $63. The last up/downgrade activity was on Mar. 2, 2010 when Needham upgraded the company from Buy to Strong Buy. Please review the illustration for TECD's summary and key statistics.
Tesoro Corporation (TSO) engages in refining and marketing petroleum products. It operates in two segments, Refining and Retail.
Tesoro Corporation recently reported first quarter 2011 net income of $107 million, or $0.74 per diluted share compared to a net loss of $155 million, or $1.11 per diluted share for the first quarter of 2010. For the first quarter, the company recorded segment operating income of $305 million compared to a segment operating loss of $125 million, excluding the $20 million write-off associated with the deferral of a capital project at the Los Angeles refinery in the first quarter a year ago. The increase in operating income is due to higher refinery throughput rates, a significant crude sourcing advantage and an improved margin environment.
“We had an excellent first quarter. Significantly higher refinery utilization rates and good progress on our EBITDA improvement initiatives combined with strong product Page 3 of 12 crack spreads and price advantaged crude oil helped deliver outstanding earnings and cash flow for the first quarter,” said Greg Goff, president and CEO of Tesoro.
The company is trading significantly below analysts' estimates. TSO has a median price target of $28 by 12 brokers and a high target of $40. The last up/downgrade activity was on Feb. 17, when Dahlman Rose initiated coverage on the company with a Buy rating. Please review the illustration for TSO's summary and key statistics.
Information was gathered from CNBC, Yahoo Finance and respective company websites. Based on the current market conditions I would suggest scaling in to any position to reduce risk. I believe all these stocks are currently undervalued and provide significant opportunities for long term investors.