There are a number of great companies in the market today. By using the ModernGraham Valuation Model, I’ve selected the five undervalued companies reviewed by ModernGraham trading closest to their 52 week low. Each of these companies has been determined to be suitable for the Enterprising Investor according to the ModernGraham approach. This is a sample of one screen that is included in ModernGraham Stocks & Screens.  Defensive Investors are defined as investors who are not able or willing to do substantial research into individual investments, and therefore need to select only the companies that present the least amount of risk. Enterprising Investors, on the other hand, are able to do substantial research and can select companies that present a moderate (though still low) amount of risk. Defensive Investors may also be interested in reviewing 5 Undervalued Companies for the Defensive Investor Near 52 Week Lows – September 2014 while also conducting further research into the following companies.
Be sure to also check out the history of this screen!
Viacom Inc. (VIAB)
Viacom is suitable for the Enterprising Investor but not the Defensive Investor, who has concerns with the poor current ratio, short dividend and high PB ratio.  The Enterprising Investor’s only issue with the company is the level of debt relative to net current assets.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities including a review of ModernGraham’s valuation of Time Warner (TWX) and ModernGraham’s valuation of Comcast (CMCSA).  From a valuation perspective, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.29 in 2010 to an estimated $4.62 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 4.94% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the price.  (See the full valuation)
FMC Corporation (FMC)
FMC Corporation is not suitable for the Defensive Investor but does satisfy the Enterprising Investor. The Defensive Investor has concerns with the low current ratio, lack of dividend payments and the high PB ratio, while the Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with research into the company and comparing it to other opportunities.  As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.55 in 2010 to an estimated $3.38 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 5.42% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the price.  (See the full valuation)
Eaton Corporation plc (ETN)
Eaton Corporation is suitable for Enterprising Investors but not for Defensive Investors. The Defensive Investor is concerned with the low current ratio and the lack of sufficient earnings growth over the last ten years. The Enterprising Investor is only concerned with the high level of debt relative to the current assets. As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with research into the company and comparing it to other opportunities. As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.49 in 2010 to an estimated $3.88 for 2014. This level of demonstrated growth outpaces the market’s implied estimate of 4.47% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the price. Â (See the full valuation)
Whole Foods Market Inc. (WFM)
Whole Foods Market is suitable for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor has concerns with the low current ratio, lack of a stable dividend record, and high PEmg and PB ratios.  The Enterprising Investor has no initial concerns as the company passes all of the investor type’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities including a review of ModernGraham’s valuation of Kroger (KR).  From a valuation side of things, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.56 in 2010 to an estimated $1.31 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 9.83% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the price.  (See the full valuation)
B&G Foods Inc. (BGS)
B&G Foods Inc. qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor has numerous concerns and in fact is only pleased by the size of the company and the earnings growth over the last ten years.  The Enterprising Investor’s only initial concern is the high level of debt relative to the net current assets.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with research into the company and comparing it to other opportunities.  From a valuation perspective, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.49 in 2010 to an estimated $1.21 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 7.55% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the price.  (See the full valuation)
What do you think?  Are these companies a good value for Enterprising Investors?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.
Disclaimer: Â The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing those holdings within the next 72 hours.
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