5 Predictable Stocks With a Margin of Safety
- By Tiziano Frateschi
According to the GuruFocus discounted cash flow calculator as of March 4, the following companies have a high margin of safety and have grown their margins over a 10-year period.
Facebook Inc.'s (FB) net margin and operating margin have grown by 26.55% and 39.04%, respectively, per annum over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 9.92% margin of safety at $259 per share. The price-earnings ratio is 25.64. The share price has been as high as $304.67 and as low as $137.10 in the last 52 weeks; it is currently 14.99% below its 52-week high and 88.91% above its 52-week low.
The online social network company has a market cap of $737.55 billion and an enterprise value of $686.25 billion.
The largest guru shareholders of the company are Chase Coleman (Trades, Portfolio) with 0.31% of outstanding shares, Spiros Segalas (Trades, Portfolio) with 0.22% and Steve Mandel (Trades, Portfolio) with 0.21%.
The Home Depot
The net margin of The Home Depot Inc. (HD) has grown 8.17% per annum over the past decade. The operating margin has grown 13.57% per annum over the past decade.
According to the DCF calculator, the stock is undervalued with a 21.82% margin of safety at $260.29 per share. The price-earnings ratio is 21.82. The share price has been as high as $292.95 and as low as $140.63 in the last 52 weeks; it is currently 11.15% below its 52-week high and 85.09% above its 52-week low.
The home improvement specialty retailer has a market cap of $280.23 billion and an enterprise value of $315.76 billion.
With 0.64% of outstanding shares, Ken Fisher (Trades, Portfolio) is the company's largest guru shareholder, followed by Pioneer Investments (Trades, Portfolio) with 0.45% and Spiros Segalas (Trades, Portfolio) with 0.20%.
Intel
Intel Corp. (INTC) has grown its net margin and operating margin by 20.79% and 28.69%, respectively, per year over the past decade.
According to the DCF calculator, the stock is undervalued with a 10.34% margin of safety at $61.24 per share. The price-earnings ratio is 12.40. The share price has been as high as $68.09 and as low as $43.61 in the last 52 weeks; it is currently 10.06% below its 52-week high and 40.43% above its 52-week low.
The chipmaker has a market cap of $248 billion and an enterprise value of $261 billion.
The largest guru shareholder of the company is PRIMECAP Management (Trades, Portfolio) with 0.80% of outstanding shares, followed by Fisher with 0.72% and Seth Klarman (Trades, Portfolio) with 0.45%.
Align Technology
The net margin of Align Technology Inc. (ALGN) has grown 17.30% per annum over the past decade. The operating margin has grown 22.60% annually over the same period.
According to the DCF calculator, the stock is undervalued with a 11.88% margin of safety at $563 per share. The price-earnings ratio is 25.09. The share price has been as high as $634 and as low as $127.88 in the last 52 weeks; it is currently 11.23% below its 52-week high and 340.42% above its 52-week low.
The dental device company has a market cap of $44.57 billion and an enterprise value of $43.69 billion.
The company's largest guru shareholder is Frank Sands (Trades, Portfolio) with 7.47% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.75% and Andreas Halvorsen (Trades, Portfolio) with 0.68%.
AutoZone
AutoZone Inc.'s (AZO) net margin and operating margin have grown 11.53% and 19.12%, respectively, per year over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 27.36% margin of safety at $1,180 per share. The price-earnings ratio is 15.46. The share price has been as high as $1,297.82 and as low as $684.91 in the last 52 weeks; it is currently 9.08% below its 52-week high and 72.29% above its 52-week low.
The company, which sells aftermarket automotive parts, tools and accessories, has a market cap of $27.19 billion and an enterprise value of $32.72 billion.
The company's largest guru shareholder is Steven Cohen (Trades, Portfolio) with 0.46% of outstanding shares, followed by Tweedy Browne (Trades, Portfolio) with 0.40% and Renaissance Technologies with 0.29%.
Disclosure: I do not own any stocks mentioned.
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This article first appeared on GuruFocus.
