There are a number of great companies in the market today. By using theÂ ModernGraham Valuation Model, I’ve selected some of the lowest P/E and undervalued mid-cap companies. The ModernGraham model is based on the full teachings of Benjamin Graham. All of these companies are suitable for the Defensive Investor and/or the Enterprising Investor. Defensive Investors […]
By using theÂ ModernGraham Valuation Model, I’ve selected the tenÂ most undervalued companies reviewed by ModernGraham. Each company has been determined to be suitable for the EnterprisingÂ Investor according to theÂ ModernGraham approach.
By using theÂ ModernGraham Valuation Model, I’ve selected the ten most undervalued companies of the S&P 500. Â All of theseÂ companiesÂ are suitable for the Defensive Investor and/or the Enterprising Investor. 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. Each company suitable for the Defensive Investor is also suitable for Enterprising Investors.
I evaluated 51 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. I also put each company through the ModernGraham valuation model based on Benjamin Graham’s value investing formulas in order to determine an intrinsic value for each. Out of those 51 companies, only 14 were found to be undervalued or fairly valued and suitable for either Defensive or Enterprising Investors. Therefore, these companies are the best undervalued stocks of the week.
Alliance Data Systems Corporation is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history, and the high PEmg and PB ratios.