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One way to find potentially undervalued stocks is by searching for those trading at steep discounts to mean analyst target price. Although target price is known to suffer from upward bias, when stocks are trading well below their target price, it might indicate that they are undervalued.

We ran a screen on low-debt stocks with high profitability, beating their industry peers on trailing-twelve-month gross, operating, and pretax margins. We screened these companies for those trading at significant discounts to their mean analyst target price.

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.

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.

Do you think the market is undervaluing these names? Use this list as a starting-off point for your own analysis.

List sorted by potential upside implied by target price.

1. Pall Corp. (NYSE:PLL): Diversified Machinery Industry. Market cap of $5.14B. MRQ total debt to assets at 0.20. Target price at $61.38 vs. current price at $44.16 (implies a potential upside of 38.98%). TTM gross margin at 54.24% vs. industry gross margin at 32.57%. TTM operating margin at 17.93% vs. industry operating margin at 12.24%. TTM pretax margin at 14.76% vs. industry pretax margin at 10.61%.

2. Kohl's Corp. (NYSE:KSS): Department Stores Industry. Market cap of $12.77B. MRQ total debt to assets at 0.14. Target price at $62.83 vs. current price at $45.43 (implies a potential upside of 38.31%). TTM gross margin at 38.36% vs. industry gross margin at 34.93%. TTM operating margin at 10.64% vs. industry operating margin at 8.16%. TTM pretax margin at 9.96% vs. industry pretax margin at 7.10%. Might be undervalued at current levels, with a PEG ratio at 0.85, and P/FCF ratio at 13.57.

3. RPC Inc. (NYSE:RES): Oil & Gas Equipment & Services Industry. Market cap of $3.30B. MRQ total debt to assets at 0.16. Target price at $30.44 vs. current price at $22.23 (implies a potential upside of 36.95%). TTM gross margin at 46.31% vs. industry gross margin at 34.79%. TTM operating margin at 26.47% vs. industry operating margin at 17.99%. TTM pretax margin at 26.64% vs. industry pretax margin at 16.19%. The stock is a short squeeze candidate, with a short float at 19.59% (equivalent to 5.8 days of average volume). It's been a rough couple of days for the stock, losing 7.34% over the last week.

4. Walgreen Co. (NYSE:WAG): Drug Stores Industry. Market cap of $31.74B. MRQ total debt to assets at 0.09. Target price at $47.52 vs. current price at $35.06 (implies a potential upside of 35.55%). TTM gross margin at 29.93% vs. industry gross margin at 25.0%. TTM operating margin at 5.51% vs. industry operating margin at 5.49%. TTM pretax margin at 5.31% vs. industry pretax margin at 5.10%.

5. M&T Bank Corp. (NYSE:MTB): Regional Bank. Market cap of $8.99B. MRQ total debt to assets at 0.10. Target price at $96.20 vs. current price at $71.56 (implies a potential upside of 34.43%). TTM gross margin at 81.58% vs. industry gross margin at 70.63%. TTM operating margin at 45.73% vs. industry operating margin at 38.84%. TTM pretax margin at 33.55% vs. industry pretax margin at 22.19%. Might be undervalued at current levels, with a PEG ratio at 0.93, and P/FCF ratio at 8.48.

6. Aetna Inc. (NYSE:AET): Health Care Plans Industry. Market cap of $13.59B. MRQ total debt to assets at 0.12. Target price at $48.87 vs. current price at $36.44 (implies a potential upside of 34.11%). TTM gross margin at 28.86% vs. industry gross margin at 20.93%. TTM operating margin at 9.19% vs. industry operating margin at 8.44%. TTM pretax margin at 8.28% vs. industry pretax margin at 6.87%. Might be undervalued at current levels, with a PEG ratio at 0.67, and P/FCF ratio at 10.68. The stock has performed poorly over the last month, losing 16.06%.

7. Unitedhealth Group, Inc. (NYSE:UNH): Health Care Plans Industry. Market cap of $47.23B. MRQ total debt to assets at 0.17. Target price at $58.36 vs. current price at $43.89 (implies a potential upside of 32.98%). TTM gross margin at 24.76% vs. industry gross margin at 20.93%. TTM operating margin at 8.61% vs. industry operating margin at 8.44%. TTM pretax margin at 7.92% vs. industry pretax margin at 6.87%. Might be undervalued at current levels, with a PEG ratio at 0.84, and P/FCF ratio at 9.21. The stock has performed poorly over the last month, losing 14.79%.

8. Aon Corporation (NYSE:AON): Insurance Brokers Industry. Market cap of $14.46B. MRQ total debt to assets at 0.15. Target price at $58.75 vs. current price at $44.25 (implies a potential upside of 32.77%). TTM gross margin at 21.14% vs. industry gross margin at 16.73%. TTM operating margin at 16.47% vs. industry operating margin at 13.42%. TTM pretax margin at 12.41% vs. industry pretax margin at 11.98%. The stock has performed poorly over the last month, losing 10.52%.

9. 3M Co. (NYSE:MMM): Conglomerates Industry. Market cap of $54.93B. MRQ total debt to assets at 0.17. Target price at $101.47 vs. current price at $77.42 (implies a potential upside of 31.07%). TTM gross margin at 51.60% vs. industry gross margin at 48.88%. TTM operating margin at 21.38% vs. industry operating margin at 16.38%. TTM pretax margin at 20.85% vs. industry pretax margin at 13.09%.

10. Boston Scientific Corporation (NYSE:BSX): Medical Instruments & Supplies Industry. Market cap of $9.28B. MRQ total debt to assets at 0.19. Target price at $7.91 vs. current price at $6.06 (implies a potential upside of 30.47%). TTM gross margin at 68.79% vs. industry gross margin at 65.76%. TTM operating margin at 14.84% vs. industry operating margin at 12.05%. TTM pretax margin at 10.53% vs. industry pretax margin at 7.95%.

11. Donaldson Company, Inc. (NYSE:DCI): Pollution & Treatment Controls Industry. Market cap of $3.85B. MRQ total debt to assets at 0.18. Target price at $65.33 vs. current price at $50.46 (implies a potential upside of 29.48%). TTM gross margin at 38.38% vs. industry gross margin at 32.59%. TTM operating margin at 14.11% vs. industry operating margin at 12.23%. TTM pretax margin at 13.42% vs. industry pretax margin at 10.60%.

12. Loews Corporation (NYSE:L): Property & Casualty Insurance Industry. Market cap of $14.37B. MRQ total debt to assets at 0.12. Target price at $46.00 vs. current price at $35.56 (implies a potential upside of 29.36%). TTM gross margin at 21.08% vs. industry gross margin at 16.65%. TTM operating margin at 21.08% vs. industry operating margin at 13.36%. TTM pretax margin at 17.20% vs. industry pretax margin at 11.92%.

13. IHS Inc. (NYSE:IHS): Information & Delivery Services Industry. Market cap of $4.52B. MRQ total debt to assets at 0.12. Target price at $90.14 vs. current price at $69.73 (implies a potential upside of 29.27%). TTM gross margin at 56.35% vs. industry gross margin at 47.64%. TTM operating margin at 17.47% vs. industry operating margin at 16.38%. TTM pretax margin at 15.80% vs. industry pretax margin at 10.84%. The stock has performed poorly over the last month, losing 12.67%.

14. Torchmark Corp. (NYSE:TMK): Life Insurance Industry. Market cap of $3.71B. MRQ total debt to assets at 0.06. Target price at $45.56 vs. current price at $35.32 (implies a potential upside of 28.98%). TTM gross margin at 25.99% vs. industry gross margin at 16.73%. TTM operating margin at 25.99% vs. industry operating margin at 13.42%. TTM pretax margin at 23.53% vs. industry pretax margin at 11.98%. Might be undervalued at current levels, with a PEG ratio at 0.86, and P/FCF ratio at 3.91.

15. Credicorp Ltd. (NYSE:BAP): Money Center Banks Industry. Market cap of $7.26B. MRQ total debt to assets at 0.19. Target price at $115.83 vs. current price at $91.07 (implies a potential upside of 27.19%). TTM gross margin at 74.45% vs. industry gross margin at 70.52%. TTM operating margin at 48.46% vs. industry operating margin at 38.80%. TTM pretax margin at 31.21% vs. industry pretax margin at 22.12%. The stock has had a couple of great days, gaining 5.03% over the last week.

16. Canon Inc. (NYSE:CAJ): Photographic Equipment & Supplies Industry. Market cap of $60.23B. MRQ total debt to assets at 0.00. Target price at $57.32 vs. current price at $45.16 (implies a potential upside of 26.92%). TTM gross margin at 55.85% vs. industry gross margin at 52.21%. TTM operating margin at 9.59% vs. industry operating margin at 9.11%. TTM pretax margin at 9.78% vs. industry pretax margin at 8.73%. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.43%, current ratio at 2.39, and quick ratio at 1.86. The stock has gained 6.86% over the last year.

17. The McGraw-Hill Companies, Inc. (MHP): Publishing Industry. Market cap of $11.19B. MRQ total debt to assets at 0.17. Target price at $47.00 vs. current price at $37.15 (implies a potential upside of 26.51%). TTM gross margin at 61.96% vs. industry gross margin at 42.87%. TTM operating margin at 23.24% vs. industry operating margin at 17.08%. TTM pretax margin at 22.0% vs. industry pretax margin at 13.58%. The stock has performed poorly over the last month, losing 13.68%.

18. Gap Inc. (NYSE:GPS): Apparel Stores Industry. Market cap of $8.54B. MRQ total debt to assets at 0.16. Target price at $19.60 vs. current price at $15.52 (implies a potential upside of 26.29%). TTM gross margin at 42.15% vs. industry gross margin at 38.10%. TTM operating margin at 12.36% vs. industry operating margin at 9.98%. TTM pretax margin at 12.20% vs. industry pretax margin at 9.32%. Might be undervalued at current levels, with a PEG ratio at 0.89, and P/FCF ratio at 10.44. The stock is currently stuck in a downtrend, trading 9.03% below its SMA20, 10.9% below its SMA50, and 21.04% below its SMA200. The stock has performed poorly over the last month, losing 19.29%.

19. ACE Limited (NYSE:ACE): Property & Casualty Insurance Industry. Market cap of $20.64B. MRQ total debt to assets at 0.05. Target price at $76.47 vs. current price at $61.07 (implies a potential upside of 25.22%). TTM gross margin at 19.96% vs. industry gross margin at 16.65%. TTM operating margin at 19.96% vs. industry operating margin at 13.36%. TTM pretax margin at 18.71% vs. industry pretax margin at 11.92%. Might be undervalued at current levels, with a PEG ratio at 0.79, and P/FCF ratio at 5.95. The stock has gained 17.04% over the last year.

20. Marsh & McLennan Companies, Inc. (NYSE:MMC): Insurance Brokers Industry. Market cap of $14.91B. MRQ total debt to assets at 0.20. Target price at $33.57 vs. current price at $27.53 (implies a potential upside of 21.93%). TTM gross margin at 17.23% vs. industry gross margin at 16.65%. TTM operating margin at 14.30% vs. industry operating margin at 13.36%. TTM pretax margin at 12.08% vs. industry pretax margin at 11.92%. The stock has gained 22.3% over the last year.

*Profitability data sourced from Fidelity, total debt to asset data and target price data sourced from Screener.co, all other data sourced from Finviz.

Source: 20 Highly Profitable, Low-Debt Stocks Trading at Deep Discounts to Target Price