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In our undervalued series, I continue looking at six leading stocks that present the best bargains and potential for long term growth, as well as short to medium term breakouts. My six picks this time are from agricultural procurement & processing and education, as well as communications and medical devices among others.

Harris corporation (NYSE:HRS) is a global communications firm with a robust customer base in the commercial as well as government segments. A leader in RF technology, it provides military grade communications technology for secure communications and other equipment. The stock last traded at $39.68, near the lower end of the 52 week band of $34.15 - $53.39, with a price earnings ratio of just over 8 times and a dividend yield of 2.8%.

While the company has solid competition in the form of major government contractors such as Raytheon (NYSE:RTN), the company has not seen much pessimism despite talks of spending and budget cuts on part of the Pentagon and/or the military itself. The recent $12 million contract award is a good example of its market position. The stock has suffered from 3rd quarter earnings that missed street expectations, when it was trading upwards of $50. Having affirmed forward guidance, the stock is an excellent bet at a great price to buy in.

ITT Educational Services Inc. (NYSE:ESI) is a major player in the higher education game, focusing on technical education and career oriented training programs. It owns the Daniel Webster college (DWC) and ITT technical institute brands, with a ‘customer’, aka student base, of around 84,000 as of Dec 31, 2010. After rising through much of the trailing twelve months, the stock is currently below the 50 and 100 days moving averages, last traded at $70.31.

The stock is currently at a price earnings multiple of 6 times, compared to a 22 times industry average, offering a whopping 113% return on investment and 296% return on equity. At under $2 billion in market capitalization, the company is a brilliant long term buy, what with the economic scenario that’s likely to increase focus on ‘career’ aka job oriented training. Major competitors such as DeVry (NYSE:DV) which owns the DeVry university, offer a price multiple of 9 times with a return on investment of merely 23%.

Autozone Inc (NYSE:AZO) is a major retailer of automotive components and accessories in the United States, with both brick and mortar stores as well as online sales. The company competes with other major auto part retailers such as Pep Boys (NYSE:PBY) and Advance Auto Parts (NYSE:AAP), and offers an industry leading total (price and dividend) return and currently trades at $312.05, practically the 52 week high. With a market cap of $12 billion, it is a large cap stock with a price earnings multiple of 17 times, ahead of the industry average at 12 times.

One may consider the pricing somewhat expensive, but remember that this stock has returned 19% 5 year average earnings growth, not to mention the Cash Conversion of just 10 days, well ahead of any other competitor.

St. Jude Medical Inc. (NYSE:STJ) is another one of our favorites in medical devices, one more focused on cardiovascular illnesses and treatments. The $14 billion company operates in every major market region including Asia Pacific, spread across 4 business segments- 2 for reporting of operating income; all of which have seen robust growth in recent quarters, particularly in the structural heart products segment. It is pertinent to note that given the economic conditions, the company has solid non-US sales pegged at nearly half of total with over 20% growth.

The stock currently trades at $45.09, around the middle of the 52 week range of $35.08 - $54.18. the price earnings ratio is a meager 16.8 times, compared to a whopping 94 times for the industry, not to mention the fact that it’s near the 5 year price earnings low. Dividend payout is low but the return on equity is a solid 20% compared to just about 5% for the industry.

Archer Daniels Midland company (NYSE:ADM) processes various agricultural products including oilseeds, wheat, and corn, to produce products including cornflour, oil and even biodiesel. It currently trades at $28.26, at a mere 9 times price earnings ratio, compared to nearly 32 times for the industry. The stock is near the 52 week low of $26 and offers a dividend yield of 2.26% at a 5 year growth rate of over 10%, well ahead of the industry at 7.76%.

The company has a high debt ratio of around 44%, and has been facing margin pressures in recent times. While the top line has been relatively strong, earnings haven’t been up to scratch lately. However, commodity prices are on the upswing again and ADM should be able to recover ground fairly quickly. The tsunami in Japan did not help as corn exports were stranded. Overall, once commodities will return to their highs, and they will, since a growing emerging market demand is unlikely to diminish, ADM will be back in play.

Rockwell Collins Inc (NYSE:COL) designs and manufactures aviation systems for the government and commercial sectors. The stock is currently at $48.84, near the 52 week low of $43.82, not surprisingly as the company missed 3rd quarter earnings by about 3 cents, still gaining on year on year quarterly performance by around 13%. Recent revenue performance has been suppressed on account of government spending cuts and ongoing recovery in the aerospace market, which is tending towards the upside.

Stock repurchases and debt redemptions have been eating into cash reserves, contributing to guidance cuts by the company’s management. Make no mistake however, the commercial aerospace segment is picking up speed and the company has recently landed an Inmarsat partnership among other contracts. With the price earnings at 12 times versus 20 times for the industry, not to mention rock bottom for the last 5 years, it may be the right time to get into this stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: 6 Undervalued Stocks I Love Right Now