5 Undervalued Stocks With Growing Earnings

Companies increasing their profitability

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Jan 15, 2018
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Companies growing their earnings per share are often good investments as they can return a solid profit to investors. According to the discount cash flow calculator, the following undervalued companies have grown their earnings over a five-year period.

The earning per share of Universal Health Services Inc Class B (UHS) have grown 12% annually over the past five years.

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According to the DCF calculator, the stock is undervalued and is trading with a 39.5% margin of safety at $116.65 per share. The price-earnings ratio is 15.79. The stock price has been as high as $129.74 and as low as $95.26 in the last 52 weeks; it is currently 11.42% below its 52-week high and 20.65% above its 52-week low.

The company operates in Acute Care Hospital Services and Behavioral Health Services. It has a market cap of $10.91 billion and an enterprise value of $14.79 billion.

The company’s largest shareholder among the gurus is Lee Ainslie (Trades, Portfolio) with 6.18% of outstanding shares, followed by Vanguard Health Care Fund (Trades, Portfolio) with 4.59%, Larry Robbins (Trades, Portfolio) with 2.42% and Andreas Halvorsen (Trades, Portfolio) with 1.26%.

CarMax Inc.'s (KMX) earning per share have grown 14% per year over the past five years.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 30.1% at $72.33 per share. The P/E ratio is 19.28. The stock price has been as high as $77.64 and as low as $54.29 in the last 52 weeks; it is currently 7.38% below its 52-week high and 32.46% above its 52-week low.

The company is engaged in the automobile dealership business and has a market cap of $13 billion and an enterprise value of $25.99 billion.

PRIMECAP Management (Trades, Portfolio) with 8.49% of outstanding shares is the largest investor among the gurus followed by Ruane Cunniff (Trades, Portfolio) with 5.32% and Chuck Akre (Trades, Portfolio) with 2.85%.

The earings per share of NewMarket Corp. (NEU) have grown 6% per year over the past five years.

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According to the DCF calculator, the stock is undervalued and is trading with a 28.7% margin of safety at $397.63 per share. The P/E ratio is 20.22. The stock price has been as high as $483.86 and as low as $377.27 in the last 52 weeks; it is currently 17.50% below its 52-week high and 5.81% above its 52-week low.

The company is a manufacturer of petroleum additives used in lubricating oils and fuels. It has a market cap of $4.73 billion and an enterprise value of $5.2 billion.

The company’s largest shareholder among the gurus is Jim Simons (Trades, Portfolio) with 0.3% of outstanding shares followed by Chuck Royce (Trades, Portfolio) with 0.15%, Mario Gabelli (Trades, Portfolio) with 0.14% and Murray Stahl (Trades, Portfolio) with 0.01%.

Gentex Corp.'s (GNTX) earnings per share have grown 18% per year over the past five years.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 18% at $23 per share. The P/E ratio is 18.15. The stock price has been as high as $22.71 and as low as $16.59 in the last 52 weeks; it is currently 0.22% below its 52-week high and 36.59% above its 52-week low.

It is a manufacturer of automatic-dimming rearview mirrors and has a market cap of $6.43 billion and an enterprise value of $5.69 billion.

Royce with 1.62% of outstanding shares is the largest investor among the gurus, followed by Columbia Wanger (Trades, Portfolio) with 0.43% and Paul Singer (Trades, Portfolio) with 0.18%.

The earnings per share of CarMax Inc. (KMX) have grown 14% per year over the past five years.

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According to the DCF calculator, the stock is undervalued and is trading with a margin of safety of 30.1% at $72.33 per share. The P/E ratio is 19.28. The stock price has been as high as $77.64 and as low as $54.29 in the last 52 weeks; it is currently 7.38% below its 52-week high and 32.46% above its 52-week low.

The company operates in the automobile dealership business. It has a market cap of $13 billion and an enterprise value of $25.99 billion.

The company’s largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 8.49% of outstanding shares, followed by Ruane Cunniff with 5.32%, Chuck Akre with 2.85% and Tom Gayner (Trades, Portfolio) with 2.72%.

Disclosure: I do not own any shares of any stocks mentioned in this article.