If you consider yourself a value investor, here are some ideas to get started on your stock search.
We ran a screen on stocks that have had positive performance over the last quarter for those that still appear undervalued, with PEG below 1 and P/FCF below 15. We then screened these names to find those with the highest profitability, with higher gross, operating, and pretax margins than their industry peers.
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 these names should be trading higher? Use this list as a starting point for your own analysis.
1. Apple Inc. (AAPL): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. PEG at 0.76. P/FCF at 12.42. TTM gross margin at 44.12% vs. industry average at 43.02%. TTM operating margin at 33.87% vs. industry average at 26.42%. TTM pretax margin at 34.2% vs. industry average at 26.53%.
2. AmTrust Financial Services, Inc. (AFSI): Operates as a multinational specialty property and casualty insurance company in the United States and internationally. PEG at 0.76. P/FCF at 8.39. TTM gross margin at 21.28% vs. industry average at 12.62%. TTM operating margin at 17.76% vs. industry average at 9.99%. TTM pretax margin at 17.43% vs. industry average at 9.%.
3. Sotheby's (BID): An auctioneer of various properties including fine art, antiques, decorative art, jewelry, and collectibles. PEG at 0.78. P/FCF at 8.37. TTM gross margin at 57.22% vs. industry average at 52.42%. TTM operating margin at 36.25% vs. industry average at 21.%. TTM pretax margin at 30.47% vs. industry average at 18.05%.
4. Bridgepoint Education, Inc. (BPI): Provides postsecondary education services. PEG at 0.4. P/FCF at 7.12. TTM gross margin at 74.5% vs. industry average at 52.42%. TTM operating margin at 31.3% vs. industry average at 21.%. TTM pretax margin at 31.56% vs. industry average at 18.05%.
5. China Green Agriculture, Inc. (CGA): Engages in the research, development, manufacture, distribution, and sale of humic acid based compound fertilizers in China. PEG at 0.25. P/FCF at 12.42. TTM gross margin at 39.01% vs. industry average at 37.22%. TTM operating margin at 23.44% vs. industry average at 17.28%. TTM pretax margin at 23.29% vs. industry average at 16.25%.
6. CNO Financial Group, Inc. (CNO): Engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. PEG at 0.52. P/FCF at 2.36. TTM gross margin at 23.32% vs. industry average at 12.62%. TTM operating margin at 11.96% vs. industry average at 9.99%. TTM pretax margin at 9.03% vs. industry average at 9.%.
7. Capella Education Co. (CPLA): Provides online postsecondary education services in the United States. PEG at 0.73. P/FCF at 9.27. TTM gross margin at 66.15% vs. industry average at 52.34%. TTM operating margin at 21.02% vs. industry average at 20.96%. TTM pretax margin at 21.05% vs. industry average at 18.%.
8. Discover Financial Services (DFS): Operates as a credit card issuer and electronic payment services company primarily in the United States. PEG at 0.78. P/FCF at 4.63. TTM gross margin at 47.89% vs. industry average at 43.08%. TTM operating margin at 46.84% vs. industry average at 40.33%. TTM pretax margin at 41.1% vs. industry average at 25.15%.
9. Encore Capital Group, Inc. (ECPG): Engages in consumer debt buying and recovery business. PEG at 0.75. P/FCF at 8.05. TTM gross margin at 72.4% vs. industry average at 40.43%. TTM operating margin at 25.84% vs. industry average at 14.79%. TTM pretax margin at 21.24% vs. industry average at 11.25%.
10. Full House Resorts Inc. (FLL): Develops, manages, invests in, and owns gaming-related enterprises. PEG at 0.91. P/FCF at 2.14. TTM gross margin at 56.04% vs. industry average at 35.25%. TTM operating margin at 25.9% vs. industry average at 18.66%. TTM pretax margin at 21.5% vs. industry average at 17.65%.
11. MetLife, Inc. (MET): Provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. PEG at 0.74. P/FCF at 4.08. TTM gross margin at 15.93% vs. industry average at 12.62%. TTM operating margin at 15.93% vs. industry average at 9.99%. TTM pretax margin at 12.82% vs. industry average at 9.%.
12. Nelnet Inc. (NNI): Focuses on providing fee-based processing services, and education-related products and services in the areas of loan financing, loan servicing, payment processing, and enrollment services. PEG at 0.43. P/FCF at 3.61. TTM gross margin at 60.28% vs. industry average at 43.57%. TTM operating margin at 57.42% vs. industry average at 39.65%. TTM pretax margin at 35.07% vs. industry average at 25.11%.
13. Orbotech Ltd. (ORBK): Engages in the design, development, manufacture, marketing, and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. PEG at 0.43. P/FCF at 8.99. TTM gross margin at 42.21% vs. industry average at 35.36%. TTM operating margin at 11.04% vs. industry average at 9.16%. TTM pretax margin at 9.77% vs. industry average at 9.34%.
14. Rick's Cabaret International Inc. (RICK): Operates upscale adult nightclubs serving primarily businessmen and professionals in the United States. PEG at 0.24. P/FCF at 10.29. TTM gross margin at 65.24% vs. industry average at 35.56%. TTM operating margin at 21.8% vs. industry average at 18.77%. TTM pretax margin at 18.19% vs. industry average at 17.92%.
15. Sauer-Danfoss Inc. (SHS): Designs, manufactures, and markets hydraulic, electronic, and mechanical components, as well as software and integrated systems that generate, transmit, and control power in mobile equipment. PEG at 0.56. P/FCF at 7.85. TTM gross margin at 37.26% vs. industry average at 32.94%. TTM operating margin at 19.27% vs. industry average at 13.36%. TTM pretax margin at 17.82% vs. industry average at 11.21%.
16. Symetra Financial Corporation (SYA): Operates as a financial services company in the life insurance industry in the United States. PEG at 0.71. P/FCF at 1.31. TTM gross margin at 15.56% vs. industry average at 12.66%. TTM operating margin at 15.56% vs. industry average at 10.01%. TTM pretax margin at 13.96% vs. industry average at 9.02%.
*Profitability 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.
