Sell side analysts provide ratings for various stocks they cover in their research universe - for respected analysts, a buy or sell rating can have a big effect on a stock's price.
We ran a screen on stocks with current 'Buy' ratings from analysts at Deutsche Bank for those that also appear undervalued relative to levered free cash flows. Stocks with high ratios of levered free cash flow/enterprise value may be undervalued by the market.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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 stocks will outperform like Deutsche Bank expects? Use this list as a starting point for your own analysis.
1. Accenture plc (ACN): Operates as a management consulting, technology services, and outsourcing company. On 10/7/11, Deutsche Bank had a Buy rating on the stock. Levered free cash flow at $3.42B vs. enterprise value at $32.42B (implies a LFCF/EV ratio at 10.55%).
2. Green Dot Corporation (GDOT): On 10/7/11, Deutsche Bank had a Buy rating on the stock. Levered free cash flow at $100.91M vs. enterprise value at $865.36M (implies a LFCF/EV ratio at 11.66%).
3. Lam Research Corporation (LRCX): Engages in designing, manufacturing, marketing, and servicing semiconductor processing equipment used in the fabrication of integrated circuits. On 11/29/11, Deutsche Bank had a Buy rating on the stock. Levered free cash flow at $423.06M vs. enterprise value at $3.72B (implies a LFCF/EV ratio at 11.37%).
4. MagnaChip Semiconductor (MX): Designs and manufactures analog and mixed-signal semiconductor products for high-volume consumer applications. On 4/28/11, Deutsche Bank had a Buy rating on the stock. Levered free cash flow at $69.48M vs. enterprise value at $462.46M (implies a LFCF/EV ratio at 15.02%).
*LFCF/EV data sourced from Yahoo Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.