Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

Next week over 500 companies report their 4Q 2011 earnings - do you have a watch list prepared?

For ideas on which companies to look out for, we ran a screen on next week's reporting companies for those that are trading well below their Graham Numbers, indicating that they appear undervalued.

The Graham number was created by the "godfather of value investing" Benjamin Graham and calculates a stock's maximum fair value based off of its EPS and book value per share (BVPS). Stocks trading below their Graham Number may be undervalued.

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

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 these companies will report positive earnings surprises? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by Graham number.

1. Whirlpool Corp. (WHR): Engages in the manufacture and marketing of home appliances worldwide. Market cap of $4.14B. Earnings to be announced on 02/01. TTM Diluted EPS at $4.55, MRQ Book Value Per Share at $55.78, Graham number at $75.57 (vs. current price at $54.28, implies a potential upside of 39.22%). The stock has recently rebounded, and is currently trading 7.18% above its SMA20 and 8.46% above its SMA50. However, the stock still trades 14.9% below its SMA200. The stock has had a good month, gaining 19.44%.

2. Alliant Techsystems Inc. (ATK): Engages in the supply of aerospace and defense products to the United States government, allied nations, and prime contractors. Market cap of $2.04B. Earnings to be announced on 02/02. TTM Diluted EPS at $8.73, MRQ Book Value Per Share at $37.74, Graham number at $86.10 (vs. current price at $61.99, implies a potential upside of 38.89%). The stock has had a good month, gaining 14.51%.

3. Oshkosh Corporation (OSK): Designs, manufactures, and markets a range of access equipment, specialty vehicles, and vehicle bodies worldwide. Market cap of $2.26B. Earnings to be announced on 01/31. TTM Diluted EPS at $2.99, MRQ Book Value Per Share at $17.48, Graham number at $34.29 (vs. current price at $24.75, implies a potential upside of 38.56%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.64). The stock has had a good month, gaining 18.09%.

4. Patterson-UTI Energy Inc. (PTEN): Provides onshore contract drilling services to oil and natural gas operators. Market cap of $2.91B. Earnings to be announced on 02/02. TTM Diluted EPS at $1.84, MRQ Book Value Per Share at $15.73, Graham number at $25.52 (vs. current price at $18.42, implies a potential upside of 38.54%). The stock is currently stuck in a downtrend, trading 7.56% below its SMA20, 8.74% below its SMA50, and 24.82% below its SMA200. The stock has lost 8.24% over the last year.

5. Entergy Corporation (ETR): Operates as an integrated energy company in the United States. Market cap of $12.32B. Earnings to be announced on 01/31. TTM Diluted EPS at $7.92, MRQ Book Value Per Share at $50.92, Graham number at $95.26 (vs. current price at $69.58, implies a potential upside of 36.90%). The stock has gained 0.33% over the last year.

6. Boston Scientific Corporation (BSX): Develops, manufactures, and markets medical devices used in various interventional medical specialties worldwide. Market cap of $8.86B. Earnings to be announced on 02/02. TTM Diluted EPS at $0.38, MRQ Book Value Per Share at $7.68, Graham number at $8.10 (vs. current price at $5.96, implies a potential upside of 35.96%). The stock has had a couple of great days, gaining 7.55% over the last week.

7. Tyson Foods Inc. (TSN): Engages in the production, distribution, and marketing of chicken, beef, pork, and prepared food products, as well as related allied products worldwide. Market cap of $7.09B. Earnings to be announced on 02/03. TTM Diluted EPS at $1.97, MRQ Book Value Per Share at $15.29, Graham number at $26.03 (vs. current price at $19.29, implies a potential upside of 34.96%). The stock has gained 11.95% over the last year.

8. Northrop Grumman Corporation (NOC): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap of $16.04B. Earnings to be announced on 02/01. TTM Diluted EPS at $6.72, MRQ Book Value Per Share at $45.01, Graham number at $82.50 (vs. current price at $61.32, implies a potential upside of 34.53%). The stock has had a good month, gaining 11.29%.

9. Annaly Capital Management, Inc. (NLY): Engages in the ownership, management, and financing of a portfolio of investment securities. Market cap of $16.05B. Earnings to be announced on 01/30. TTM Diluted EPS at $1.36, MRQ Book Value Per Share at $16.22, Graham number at $22.28 (vs. current price at $16.58, implies a potential upside of 34.37%). The stock has gained 8.03% over the last year.

10. First Interstate Bancsystem Inc. (FIBK): Operates as the bank holding company for First Interstate Bank that provides commercial and consumer banking services. Market cap of $600.43M. Earnings to be announced on 01/30. TTM Diluted EPS at $0.91, MRQ Book Value Per Share at $16.70, Graham number at $18.49 (vs. current price at $13.82, implies a potential upside of 33.80%). The stock has had a good month, gaining 19.81%.

11. Convergys Corporation (CVG): Provides relationship management solutions worldwide. Market cap of $1.57B. Earnings to be announced on 01/30. TTM Diluted EPS at $1.12, MRQ Book Value Per Share at $11.83, Graham number at $17.27 (vs. current price at $13.02, implies a potential upside of 32.61%). The stock is a short squeeze candidate, with a short float at 6.08% (equivalent to 7.96 days of average volume). The stock has lost 6.97% over the last year.

12. International Rectifier Corporation (IRF): Engages in the design, manufacture, and marketing of power management semiconductors. Market cap of $1.62B. Earnings to be announced on 02/01. TTM Diluted EPS at $2.17, MRQ Book Value Per Share at $19.51, Graham number at $30.86 (vs. current price at $23.35, implies a potential upside of 32.18%). The stock has had a couple of great days, gaining 10.83% over the last week.

13. Benchmark Electronics Inc. (BHE): Provides electronics manufacturing services in the Americas, Asia, and Europe. Market cap of $982.50M. Earnings to be announced on 02/02. TTM Diluted EPS at $1.14, MRQ Book Value Per Share at $19.09, Graham number at $22.13 (vs. current price at $16.86, implies a potential upside of 31.25%). The stock is a short squeeze candidate, with a short float at 5.98% (equivalent to 10.48 days of average volume). The stock has had a couple of great days, gaining 7.39% over the last week.

14. Cigna Corp. (CI): Operates as a health service organization. Market cap of $13.17B. Earnings to be announced on 02/02. TTM Diluted EPS at $5.50, MRQ Book Value Per Share at $28.71, Graham number at $59.61 (vs. current price at $46.09, implies a potential upside of 29.33%). Might be undervalued at current levels, with a PEG ratio at 0.83, and P/FCF ratio at 7.74. The stock has had a good month, gaining 12.95%.

15. Cohu, Inc. (COHU): Engages in the development, manufacture, sale, and servicing of test handling and burn-in related equipment, and thermal sub-systems for the semiconductor industry worldwide. Market cap of $314.08M. Earnings to be announced on 02/01. TTM Diluted EPS at $1.00, MRQ Book Value Per Share at $12.11, Graham number at $16.51 (vs. current price at $12.85, implies a potential upside of 28.46%). The stock has had a good month, gaining 17.65%.

16. Aetna Inc. (AET): Operates as a diversified health care benefits company in the United States. Market cap of $15.85B. Earnings to be announced on 02/01. TTM Diluted EPS at $4.70, MRQ Book Value Per Share at $29.06, Graham number at $55.44 (vs. current price at $43.59, implies a potential upside of 27.17%). Might be undervalued at current levels, with a PEG ratio at 0.77, and P/FCF ratio at 7.18. The stock has gained 34.54% over the last year.

17. Olin Corp. (OLN): Engages in the manufacture and sale of chlor alkali products in the United States and internationally. Market cap of $1.78B. Earnings to be announced on 01/30. TTM Diluted EPS at $2.79, MRQ Book Value Per Share at $12.56, Graham number at $28.08 (vs. current price at $22.20, implies a potential upside of 26.48%). Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.6%, current ratio at 1.84, and quick ratio at 1.48. The stock has had a couple of great days, gaining 5.46% over the last week.

18. Assurant Inc. (AIZ): Provides specialized insurance products and related services in North America and internationally. Market cap of $3.62B. Earnings to be announced on 02/01. TTM Diluted EPS at $1.97, MRQ Book Value Per Share at $53.96, Graham number at $48.91 (vs. current price at $39.01, implies a potential upside of 25.37%). The stock has gained 4.18% over the last year.

19. Lear Corp. (LEA): Engages in the design and manufacture of automotive seat systems and related components for automobiles and light trucks. Market cap of $3.37B. Earnings to be announced on 02/02. TTM Diluted EPS at $5.13, MRQ Book Value Per Share at $25.68, Graham number at $54.44 (vs. current price at $43.44, implies a potential upside of 25.33%). The stock has had a good month, gaining 19.95%.

20. PC Connection, Inc. (PCCC): Operates as a direct marketer of various information technology solutions. Market cap of $330.11M. Earnings to be announced on 02/02. TTM Diluted EPS at $1.06, MRQ Book Value Per Share at $10.50, Graham number at $15.82 (vs. current price at $12.65, implies a potential upside of 25.10%). The stock has had a good month, gaining 12.32%.

*BVPS and EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 20 Companies Releasing Earnings Next Week Undervalued By Graham Number