Do you consider yourself a value investor? For ideas on how to start your own value search, we ran a screen.
We began by screening the large-cap sector for stocks that appear undervalued relative to earnings growth, with PEG below 1.
We then screened for those with strong profitability compared to industry peers, with higher gross, operating, and pretax margins than their industry averages by at least 5% on each margin. This indicates that these companies are taking a greater percentage of their revenues as profits, and they also have stronger control over their cost structures.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall.
Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
List sorted by difference between pretax margin and industry average.
1. Discover Financial Services (DFS): Operates as a credit card issuer and electronic payment services company primarily in the United States. Market cap at $17.18B, most recent closing price at $32.40. PEG at 0.8. TTM gross margin at 50.94% vs. industry average at 34.56%. TTM operating margin at 49.89% vs. industry average at 31.81%. TTM pretax margin at 44.05% vs. industry average at 26.09%.
2. Chesapeake Energy Corporation (CHK): Engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. Market cap at $11.66B, most recent closing price at $17.61. PEG at 0.92. TTM gross margin at 43.92% vs. industry average at 31.74%. TTM operating margin at 22.69% vs. industry average at 14.17%. TTM pretax margin at 25.25% vs. industry average at 18.13%.
3. Las Vegas Sands Corp. (LVS): Develops, and operates various integrated resort properties primarily in the United States, Macau, and Singapore. Market cap at $37.01B, most recent closing price at $44.98. PEG at 0.76. TTM gross margin at 48.04% vs. industry average at 36.81%. TTM operating margin at 26.48% vs. industry average at 19.28%. TTM pretax margin at 23.13% vs. industry average at 17.4%.
4. JPMorgan Chase & Co. (JPM): Provides various financial services worldwide. Market cap at $124.93B, most recent closing price at $32.82. PEG at 0.99. TTM gross margin at 81.73% vs. industry average at 61.1%. TTM operating margin at 47.11% vs. industry average at 38.14%. TTM pretax margin at 23.78% vs. industry average at 18.11%.
*Profitability data sourced from Fidelity, 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.
