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Whenever a company releases earnings data that beat analyst expectations, the stock will often rise in value to price in the good news. If you believe that company characteristics can cause EPS surprises to persist across time, this list may be very interesting to you.

To create the list, we started with a universe of stocks that are undervalued based on the levered free cash flow to enterprise value ratio.

To refine the list, we only focused on those names that have been underestimated by Wall Street analysts. In other words, all these companies have a history of bullish earnings surprises.

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.

Do you think the track record of these companies make them attractive buys at current levels? Use this list as a starting point for your own analysis.

List sorted by average earnings surprise.

1. Arch Capital Group Ltd. (ACGL): Provides insurance and reinsurance products worldwide. In Dec 2010: Reported EPS at 0.86 vs. estimate at 0.8 (surprise of 7.5%). In Mar 2011: Reported EPS at 0.06 vs. estimate at -0.27 (surprise of 122.2%). In Jun 2011: Reported EPS at 0.45 vs. estimate at 0.19 (surprise of 136.8%). In Sep 2011: Reported 0.78 vs. estimate at 0.62 (surprise of 25.8%. [Average earnings surprise at 73.08%]. Levered free cash flow at $558.13M vs. enterprise value at $4.65B (implies a LFCF/EV ratio at 12.%).

2. ProAssurance Corporation (PRA): Provides professional liability insurance products primarily to physicians, dentists, other healthcare providers, and healthcare facilities in the United States. In Dec 2010: Reported EPS at 3.08 vs. estimate at 1.35 (surprise of 128.1%). In Mar 2011: Reported EPS at 1.46 vs. estimate at 1.16 (surprise of 25.9%). In Jun 2011: Reported EPS at 1.74 vs. estimate at 1.26 (surprise of 38.1%). In Sep 2011: Reported 1.57 vs. estimate at 1.29 (surprise of 21.7%. [Average earnings surprise at 53.45%]. Levered free cash flow at $458.99M vs. enterprise value at $2.24B (implies a LFCF/EV ratio at 20.49%).

3. Alleghany Corp. (Y): Engages in the property and casualty, and surety insurance business. In Dec 2010: Reported EPS at 4.76 vs. estimate at 3.59 (surprise of 32.6%). In Mar 2011: Reported EPS at 5.46 vs. estimate at 3.26 (surprise of 67.5%). In Jun 2011: Reported EPS at 3.02 vs. estimate at 2.22 (surprise of 36%). In Sep 2011: Reported 2.75 vs. estimate at 2.43 (surprise of 13.2%. [Average earnings surprise at 37.33%]. Levered free cash flow at $454.82M vs. enterprise value at $2.78B (implies a LFCF/EV ratio at 16.36%).

4. Bridgepoint Education, Inc. (BPI): Provides postsecondary education services. In Dec 2010: Reported EPS at 0.45 vs. estimate at 0.37 (surprise of 21.6%). In Mar 2011: Reported EPS at 0.92 vs. estimate at 0.61 (surprise of 50.8%). In Jun 2011: Reported EPS at 0.9 vs. estimate at 0.69 (surprise of 30.4%). In Sep 2011: Reported 0.78 vs. estimate at 0.58 (surprise of 34.5%. [Average earnings surprise at 34.32%]. Levered free cash flow at $181.98M vs. enterprise value at $970.68M (implies a LFCF/EV ratio at 18.75%).

5. Obagi Medical Products, Inc. (OMPI): Develops and markets topical aesthetic and therapeutic prescription skin care systems. In Dec 2010: Reported EPS at 0.14 vs. estimate at 0.09 (surprise of 55.6%). In Mar 2011: Reported EPS at 0.16 vs. estimate at 0.13 (surprise of 23.1%). In Jun 2011: Reported EPS at 0.18 vs. estimate at 0.16 (surprise of 12.5%). In Sep 2011: Reported 0.24 vs. estimate at 0.17 (surprise of 41.2%. [Average earnings surprise at 33.1%]. Levered free cash flow at $25.13M vs. enterprise value at $158.84M (implies a LFCF/EV ratio at 15.82%).

6. Teradyne Inc. (TER): Provides automatic test equipment products and services worldwide. In Dec 2010: Reported EPS at 0.37 vs. estimate at 0.25 (surprise of 48%). In Mar 2011: Reported EPS at 0.39 vs. estimate at 0.37 (surprise of 5.4%). In Jun 2011: Reported EPS at 0.5 vs. estimate at 0.41 (surprise of 22%). In Sep 2011: Reported 0.34 vs. estimate at 0.23 (surprise of 47.8%. [Average earnings surprise at 30.8%]. Levered free cash flow at $236.11M vs. enterprise value at $1.48B (implies a LFCF/EV ratio at 15.95%).

7. Brocade Communications Systems, Inc. (BRCD): Brocade Communications Systems, Inc. supplies networking equipment comprising end-to-end Internet protocol based Ethernet and storage area networking solutions. In Jan 2011: Reported EPS at 0.12 vs. estimate at 0.1 (surprise of 20%). In Apr 2011: Reported EPS at 0.13 vs. estimate at 0.1 (surprise of 30%). In Jul 2011: Reported EPS at 0.09 vs. estimate at 0.08 (surprise of 12.5%). In Oct 2011: Reported 0.16 vs. estimate at 0.1 (surprise of 60%. [Average earnings surprise at 30.63%]. Levered free cash flow at $374.09M vs. enterprise value at $2.85B (implies a LFCF/EV ratio at 13.13%).

8. Lincoln Educational Services Corporation (LINC): Provides career-oriented post-secondary education services in the United States. In Dec 2010: Reported EPS at 1.2 vs. estimate at 0.89 (surprise of 34.8%). In Mar 2011: Reported EPS at 0.46 vs. estimate at 0.36 (surprise of 27.8%). In Jun 2011: Reported EPS at 0.22 vs. estimate at 0.17 (surprise of 29.4%). In Sep 2011: Reported 0.13 vs. estimate at 0.1 (surprise of 30%. [Average earnings surprise at 30.5%]. Levered free cash flow at $30.34M vs. enterprise value at $196.71M (implies a LFCF/EV ratio at 15.42%).

9. Comtech Telecommunications Corp. (CMTL): Designs and produces a wide range of telecom systems and services. In Jan 2011: Reported EPS at 0.52 vs. estimate at 0.4 (surprise of 30%). In Apr 2011: Reported EPS at 0.47 vs. estimate at 0.39 (surprise of 20.5%). In Jul 2011: Reported EPS at 0.42 vs. estimate at 0.37 (surprise of 13.5%). In Oct 2011: Reported 0.47 vs. estimate at 0.3 (surprise of 56.7%. [Average earnings surprise at 30.17%]. Levered free cash flow at $69.66M vs. enterprise value at $323.60M (implies a LFCF/EV ratio at 21.53%).

10. Blyth, Inc. (BTH): Operates as a multi-channel company in the home fragrance and decorative accessories industry. In Apr 2010: Reported EPS at 0.43 vs. estimate at 0.42 (surprise of 2.4%). In Jul 2010: Reported EPS at 0.09 vs. estimate at 0.07 (surprise of 28.6%). In Oct 2010: Reported EPS at 0.31 vs. estimate at 0.18 (surprise of 72.2%). In Jan 2011: Reported 2.28 vs. estimate at 2.06 (surprise of 10.7%. [Average earnings surprise at 28.48%]. Levered free cash flow at $73.27M vs. enterprise value at $390.11M (implies a LFCF/EV ratio at 18.78%).

11. United Online, Inc. (UNTD): Provides consumer products and services over the Internet, primarily in the United States and internationally. In Dec 2010: Reported EPS at 0.3 vs. estimate at 0.26 (surprise of 15.4%). In Mar 2011: Reported EPS at 0.25 vs. estimate at 0.2 (surprise of 25%). In Jun 2011: Reported EPS at 0.3 vs. estimate at 0.21 (surprise of 42.9%). In Sep 2011: Reported 0.23 vs. estimate at 0.18 (surprise of 27.8%. [Average earnings surprise at 27.78%]. Levered free cash flow at $78.52M vs. enterprise value at $652.63M (implies a LFCF/EV ratio at 12.03%).

12. Mitel Networks Corp. (MITL): Provides integrated communications solutions primarily to the SME market in the United States and internationally. In Jan 2011: Reported EPS at 0.15 vs. estimate at 0.13 (surprise of 15.4%). In Apr 2011: Reported EPS at 0.19 vs. estimate at 0.15 (surprise of 26.7%). In Jul 2011: Reported EPS at 0.16 vs. estimate at 0.14 (surprise of 14.3%). In Oct 2011: Reported 0.24 vs. estimate at 0.17 (surprise of 41.2%. [Average earnings surprise at 24.4%]. Levered free cash flow at $48.04M vs. enterprise value at $399.38M (implies a LFCF/EV ratio at 12.03%).

13. Aetna Inc. (AET): Operates as a diversified health care benefits company in the United States. In Dec 2010: Reported EPS at 0.63 vs. estimate at 0.62 (surprise of 1.6%). In Mar 2011: Reported EPS at 1.43 vs. estimate at 0.97 (surprise of 47.4%). In Jun 2011: Reported EPS at 1.35 vs. estimate at 1.08 (surprise of 25%). In Sep 2011: Reported 1.4 vs. estimate at 1.15 (surprise of 21.7%. [Average earnings surprise at 23.92%]. Levered free cash flow at $3.12B vs. enterprise value at $16.27B (implies a LFCF/EV ratio at 19.18%).

14. Dell Inc. (DELL): Provides integrated technology solutions in the information technology (IT) industry worldwide. In Jan 2011: Reported EPS at 0.53 vs. estimate at 0.37 (surprise of 43.2%). In Apr 2011: Reported EPS at 0.55 vs. estimate at 0.44 (surprise of 25%). In Jul 2011: Reported EPS at 0.54 vs. estimate at 0.49 (surprise of 10.2%). In Oct 2011: Reported 0.54 vs. estimate at 0.47 (surprise of 14.9%. [Average earnings surprise at 23.32%]. Levered free cash flow at $3.56B vs. enterprise value at $21.12B (implies a LFCF/EV ratio at 16.86%).

15. Unitedhealth Group, Inc. (UNH): Provides healthcare services in the United States. In Dec 2010: Reported EPS at 1.05 vs. estimate at 0.84 (surprise of 25%). In Mar 2011: Reported EPS at 1.22 vs. estimate at 0.89 (surprise of 37.1%). In Jun 2011: Reported EPS at 1.16 vs. estimate at 0.94 (surprise of 23.4%). In Sep 2011: Reported 1.17 vs. estimate at 1.12 (surprise of 4.5%. [Average earnings surprise at 22.5%]. Levered free cash flow at $8.02B vs. enterprise value at $50.28B (implies a LFCF/EV ratio at 15.95%).

16. Teledyne Technologies Inc. (TDY): Provides electronic components, instruments, and communications products in U. In Dec 2010: Reported EPS at 0.99 vs. estimate at 0.8 (surprise of 23.7%). In Mar 2011: Reported EPS at 0.87 vs. estimate at 0.73 (surprise of 19.2%). In Jun 2011: Reported EPS at 1.04 vs. estimate at 0.77 (surprise of 35.1%). In Sep 2011: Reported 0.92 vs. estimate at 0.85 (surprise of 8.2%. [Average earnings surprise at 21.55%]. Levered free cash flow at $240.84M vs. enterprise value at $2.35B (implies a LFCF/EV ratio at 10.25%).

17. Cubic Corporation (CUB): Engages in the design, development, manufacture, integration, installation, operation, maintenance, and support of defense electronics and transportation fare collection systems worldwide. In Dec 2010: Reported EPS at 0.74 vs. estimate at 0.56 (surprise of 32.1%). In Mar 2011: Reported EPS at 0.75 vs. estimate at 0.6 (surprise of 25%). In Jun 2011: Reported EPS at 0.78 vs. estimate at 0.71 (surprise of 9.9%). In Sep 2011: Reported 0.9 vs. estimate at 0.77 (surprise of 16.9%. [Average earnings surprise at 20.97%]. Levered free cash flow at $93.84M vs. enterprise value at $854.98M (implies a LFCF/EV ratio at 10.98%).

*Earnings surprises and LFCF/EV ratios sourced from Yahoo Finance.

Source: Top 17 Most Undervalued, Underestimated Companies