26 Best Stocks For Value Investors This Week - 2/6/16

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Includes: ACN, AET, AFL, ALLE, AME, BWA, CERN, CI, CSCO, CSX, FLR, FOXA, GMCR, GPC, HBI, MET, MMC, MSI, NOV, NSC, ROK, SNI, TJX, TMK, UNP, VFC
by: Benjamin Clark

Summary

We analyzed 50 different companies this week and has narrowed the list to the best of those companies.

All of the stocks listed here are suitable for the Defensive Investor and/or the Enterprising Investor following our approach.

Each company is either found to be undervalued or fairly valued by our formula.

We evaluated 50 different companies this week to determine whether they are suitable for Defensive Investors, those unwilling to do substantial research, or Enterprising Investors, those who are willing to do such research. We also put each company through our valuation model based on Benjamin Graham's value investing formulas in order to determine an intrinsic value for each. Out of those 50 companies, only 26 were found to be undervalued or fairly valued and suitable for either Defensive or Enterprising Investors.

The Elite

The following companies were found to be suitable for either the Defensive Investor or Enterprising Investor and undervalued:

Aflac Inc (NYSE:AFL)

Aflac Inc qualifies for both the Enterprising Investor and the more conservative Defensive Investor. In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial position.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $4.72 in 2012 to an estimated $6.24 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 0.40% annual earnings growth over the next 7-10 years.

Ametek Inc (NYSE:AME)

Ametek Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio as well as the high PEmg and PB ratios. The Enterprising Investor is only initially concerned with the level of debt relative to the net current assets.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.21 in 2011 to an estimated $2.24 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 5.85% annual earnings growth over the next 7-10 years.

BorgWarner Inc (NYSE:BWA)

BorgWarner Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, and the inconsistent dividend history. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.24 in 2011 to an estimated $2.67 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.08% annual earnings growth over the next 7-10 years.

Cigna Corp (NYSE:CI)

Cigna Corp qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PB ratio. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $4.11 in 2011 to an estimated $6.88 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 5.46% annual earnings loss over the next 7-10 years.

Cisco Systems Inc (NASDAQ:CSCO)

Cisco Systems Inc qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only initially concerned by the short dividend record while the Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.30 in 2012 to an estimated $1.79 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 2.34% annual earnings growth over the next 7-10 years.

Fluor Corp (NYSE:FLR)

Fluor Corp qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned by the low current ratio, and the Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $3.13 in 2011 to an estimated $3.57 for 2015. This level of demonstrated earnings growth supports the market's implied estimate of 1.77% annual earnings growth over the next 7-10 years.

Keurig Green Mountain Inc (NASDAQ:GMCR)

Keurig Green Mountain Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the short dividend history along with the high PEmg and PB ratios. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.30 in 2012 to an estimated $3.24 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 9.51% annual earnings loss over the next 7-10 years.

Marsh & McLennan Company (NYSE:MMC)

Marsh & McLennan Company qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.38 in 2011 to an estimated $2.57 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 6.11% annual earnings loss over the next 7-10 years.

MetLife Inc (NYSE:MET)

MetLife Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth or stability over the last ten years. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $3.02 in 2011 to an estimated $4.26 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 0.60% annual earnings growth over the next 7-10 years.

Motorola Solutions Inc (NYSE:MSI)

Motorola Solutions Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years, the inconsistent dividend history, and the high PB ratio. The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from a loss of $0.15 in 2011 to an estimated gain of $3.70 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 4.45% annual earnings growth over the next 7-10 years.

National Oilwell Varco Inc (NYSE:NOV)

National Oilwell Varco Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the short dividend history. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $4.24 in 2011 to an estimated $4.36 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of negative 0.96% annual earnings growth over the next 7-10 years.

Scripps Networks Interactive Inc (NYSE:SNI)

Scripps Networks Interactive Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth or stability over the last ten years, and the short dividend history. The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.82 in 2011 to an estimated $3.89 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 3.74% annual earnings loss over the next 7-10 years.

TJX Companies Inc (NYSE:TJX)

TJX Companies Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio as well as the high PEmg and PB ratios. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.56 in 2012 to an estimated $2.98 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 7.69% annual earnings growth over the next 7-10 years.

Torchmark Corp (NYSE:TMK)

Torchmark Corp qualifies for both the Enterprising Investor and the more conservative Defensive Investor. In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial position.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.63 in 2011 to an estimated $3.91 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 2.45% annual earnings growth over the next 7-10 years.

Twenty-First Century Fox Inc (NASDAQ:FOXA)

Twenty-First Century Fox Inc qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned by the insufficient earnings stability over the last ten years, and the Enterprising Investor is only concerned with the level of debt relative to the net current assets.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.58 in 2012 to an estimated $2.43 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.09% annual earnings growth over the next 7-10 years.

Union Pacific Corporation (NYSE:UNP)

Union Pacific Corporation qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned by the low current ratio, and the Enterprising Investor is willing to overlook concerns regarding the level of debt relative to the current assets because the company meets the more stringent Defensive Investor requirements.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $3.23 in 2012 to an estimated $5.26 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 2.69% annual earnings growth over the next 7-10 years.

VF Corporation (NYSE:VFC)

VF Corporation qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.48 in 2011 to an estimated $2.66 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 7.59% annual earnings loss over the next 7-10 years.

The Good

The following companies were found to be suitable for the Defensive Investor or Enterprising Investor and Fairly Valued:

Accenture PLC (NYSE:ACN)

Accenture PLC qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, and the high PEmg and PB ratios. The Enterprising Investor is only initially concerned by the low current ratio.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $3.22 in 2012 to an estimated $4.80 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 6.44% annual earnings growth over the next 7-10 years.

Aetna Inc (NYSE:AET)

Aetna Inc qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned by the low current ratio, and the Enterprising Investor is willing to overlook concerns regarding the level of debt relative to the current assets because the company meets the more stringent Defensive Investor requirements.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $4.03 in 2011 to an estimated $5.91 for 2015. This level of demonstrated earnings growth supports the market's implied estimate of 4.52% annual earnings growth over the next 7-10 years.

Allegion PLC (NYSE:ALLE)

Allegion PLC qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the short history as a stand-alone company. The Enterprising Investor is only initially concerned with the level of debt relative to the net current assets.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.76 in 2011 to an estimated $1.53 for 2015. This level of demonstrated earnings growth supports the market's implied estimate of 15.07% annual earnings growth over the next 7-10 years.

Cerner Corporation (NASDAQ:CERN)

Cerner Corporation qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the lack of dividends as well as the high PEmg and PB ratios. The Enterprising Investor is only initially concerned with the lack of dividends.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.70 in 2011 to an estimated $1.37 for 2015. This level of demonstrated earnings growth supports the market's implied estimate of 16.26% annual earnings growth over the next 7-10 years.

CSX Corporation (NYSE:CSX)

CSX Corporation qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned by the low current ratio, and the Enterprising Investor is only concerned by the level of debt relative to the net current assets.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $1.51 in 2012 to an estimated $1.86 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 1.77% annual earnings growth over the next 7-10 years.

Genuine Parts Co (NYSE:GPC)

Genuine Parts Co qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio along with the high PB ratio. The Enterprising Investor is only initially concerned by the low current ratio.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $3.08 in 2011 to an estimated $4.41 for 2015. This level of demonstrated earnings growth supports the market's implied estimate of 5.51% annual earnings growth over the next 7-10 years.

Hanesbrands Inc (NYSE:HBI)

Hanesbrands Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the short dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.46 in 2011 to an estimated $0.93 for 2015. This level of demonstrated earnings growth supports the market's implied estimate of 12.07% annual earnings growth over the next 7-10 years.

Norfolk Southern Corp (NYSE:NSC)

Norfolk Southern Corp qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned by the low current ratio, and the Enterprising Investor is willing to overlook concerns regarding the level of debt relative to the current assets because the company meets the more stringent Defensive Investor requirements.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $4.71 in 2012 to an estimated $5.58 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 1.73% annual earnings growth over the next 7-10 years.

Rockwell Automation Inc (NYSE:ROK)

Rockwell Automation Inc qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years along with the high PB ratio. The Enterprising Investor has no initial concerns.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $4.10 in 2012 to an estimated $5.66 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 4.09% annual earnings growth over the next 7-10 years.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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