4 Must Haves For Value Investors

|
Includes: IPG, KKR, STLD, VIP
by: Leonid Kanopka

I feel that in order to see substantial gains in the market, one must do substantial research. Finding stocks that are being sold at a true "value." A momentarily bad quarter, or market sentiment has pushed the market low, on some stocks more than others. I have compiled the data for 4 companies in different sectors that are "must haves" for value investors who are seeking long term growth.

1.) The Interpublic Group of Companies, Inc. (NYSE:IPG) through its subsidiaries provides advertising and marketing services worldwide. IPG is the world’s third largest advertising agency, with global revenue streams from both traditional advertising and marketing services. The company continues to look for strategic investments to capitalize on the emerging markets. The current price is $7.99 with a 1 year price target of $12.97 (62.33% upside potential). IPG also pays a dividend yield of 3%. I like the fact that Interpublic Group has a strict cost control strategy, which has pulled the company through the challenging revenue environment, and positioned it for future growth and profitability, not to mention the company's strong liquidity position with no net debt. Current revenue growth yoy is 19.8%, and IPG's days sales in receivables is the highest within its media agencies subsector, further proving its potential for growth. Forward PEG is 0.8, which represents a 42% discount to its subsector, and trailing P/E of 14.4x trades at an 8% discount. The stock boasts a 4-star S&P and is selling at a discount for a true value investor.

2.) Steel Dynamics Inc. (NASDAQ:STLD) engages in the manufacture and sale of steel products in the United States. It operates in three segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations. This stock is currently trading at a true value of $11.37, with a 1 year price target of $17.46 (53.56% upside potential). STLD has a 4-star S&P rating and out of the 16 analysts, 15 rate it a "buy" and 1 "strong buy." The company's debt-to-capital has been higher than its subsector average for the past 5 years, which shows that this company is very good with managing debt in comparison to its peers. I also like the fact that there is a 3.7% dividend yield. Steel Dynamics' forward PEG is at 0.4, which is on the lower end of its 5-yr range of 0.2 - 5.0, and trailing P/E of 10.9x represents a 16% discount compared to 5-yr average of 13x. This stock looks heavily underpriced, and would be a good value investment.

3.) VimpelCom Ltd. (NYSE:VIP) operates as an integrated telecommunications services provider, offering voice and data services through a range of wireless, fixed, and broadband technologies. The current stock price is $10.45 with a 1 year price target of $17.18 (64.4% upside potential), not to mention a whopping 7.74% current dividend yield. VIP has been the center of attention in the news lately, signaling that people are beginning to realize the intrinsic value is much higher than market value. VIP's days sales in inventory is the highest within its mobile telecom subsector, which shows strong growth potential at current price. Also, compared to its subsector, VIP is currently trading at a significant discount based on trailing P/E, forward P/E, and forward PEG. Current trailing P/E is 7.5x, which represents a 66% discount compared to its peers. This stock is heavily undervalued, and I would recommend this value stock.

4.) Kohlberg Kravis Roberts & Co. (NYSE:KKR) is a private equity and venture capital firm specializing in acquisitions, leveraged buyouts, management buyouts, and mezzanine investments in large cap companies. Current price is $12.10 with a 1 year price target of $17.68 (46.12% upside potential). KKR's gross margin for the trailing 4 quarters is 97%, which is the highest within its asset managers subsector, further showing the "value" of this stock. This company seems very undervalued compared to its peers, yet it still offers a dividend yield of 6.24%. KKR's shares are currently trading 3.7% above their 50-day moving average, which signals price momentum, but is still 22.6% below its 200-day moving average of $15.14 and 11.9% below its 52-week high of $19.16. Overall this is a very attractive stock at the current price, not to mention its dividend yield.

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