3 Beaten-Down Blue Chips

Includes: CSCO, NVS, SNY
by: Vuru

The following blue chips have been harshly beaten-down, but continue to show impressive fundamentals.

Using our proprietary tool, we screened over 500 companies to find large-cap stocks that are undervalued.

These stocks are undervalued according to their growth rate (FCF), using a 15% discount rate.

We hope you’ll use this list as a starting point for your analysis.

Cisco Systems Inc. (NASDAQ:CSCO)

Cisco designs, manufactures and sells IP-based networking and products related to the communications and IT industry.

Cisco’s shares are down 22.8% year to date as of June 30th.


· Growing Positive Free Cash Flow (1.25B in 2001 and 8.19B in 2010)

· Incredible Pricing Power (72.79% Gross Margin in 2010)

· History of Stock Buybacks


· Increasing Competition in Industry (21% Net Income Margin in 2007 and 16.98% Net Income Margin in 2009).

Current Price: $15.86

Growth Price: $25.36

Undervalued by 59.91%

Our Grade: 90.30. See Full Report Here.

Novartis AG (NYSE:NVS)

Novartis provides healthcare solutions through medicines, preventive vaccines, diagnostic tools and general pharmaceuticals.

Novartis may be able to dominate the multibillion-dollar MS market with its new Gilenya pill as Merck KGaA (NYSE:MRK) pulls out a rival treatment.


· Excellent History of Cash Return on Invested Capital (21.15% CROIC in 2010)

· Strong Return on Equity (17.37% ROE in 2010)

· Non-Capital Intensive Business (25.48% of Profits Spent on Capital Expenditures)


· Slightly Declining Competitive Advantage

· Overvalued According to Stability Price

Current Price: $61.15

Growth Price: $83.08

Undervalued by 35.86%

Our Grade: 89.67. See Full Report Here.

Sanofi SA (NYSE:SNY)

Sanofi is a global healthcare company that discovers, develops and distributes therapeutic solutions in the field of diabetes, human vaccines, rare diseases and animal health.

Sanofi’s available market share is increasing with growing levels of obesity and longevity.


· Strong Balance Sheet (TL-to-TA is 0.38 in 2010)

· Rising Positive Free Cash Flow (1.25B in 2001 and 8.19B in 2010)

· Growing Dividends Paid Per Share


· Declining Net Income Margin (25.80% in 2003 and 17.86% in 2010)

· Mediocre Return on Shareholder’s Equity (10.77% in 2010)

Current Price: $40.40

Growth Price: $78.30

Undervalued by 93.80%

Our Grade: 87.58. See Full Report Here.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.