Compiled by Alexander Crawford:This list might offer an interesting starting point to a value-oriented investor.
The following is a group of four undervalued stocks, with Price to Free Cash Flow (P/FCF) ratios below 5. In other words, free cash flows makes up more than 20% of each company's market capitalization.
Among these stocks, we found those with low levels of risk, as defined by the RiskGrade ratings developed by the RiskMetrics Group. RiskGrades is calibrated to be more intuitive and easier to use than standard deviation or beta. According to the company, their rating system captures all the components of market risk: equity, interest rate, currency, and commodity risk.
The lower the RiskGrade rating, the lower the risk level of the stock. Nippon Telegraph & Telephone Corp. (NTT), the first company in our list, has a RiskGrade rating of 61, which means that it is less risky than 91% of tickers on U.S. markets.
We're not going to go into detailed analysis for each company. The goal here is to give a starting point to risk-averse investors looking to find value. Full details below.
P/FCF ratios, performance data, and short flow data sourced from Finviz, RiskGrades sourced from RiskMetrics group.
Analyze These Ideas (Tools Will Open In A New Window)
1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize market cap changes for the top stocks mentioned
1. Nippon Telegraph & Telephone Corp. (NTT): Telecom Services - Foreign Industry. Market cap of $62.69B. P/FCF at 3.7. RiskGrade rating at 61. Short float at 0.1%, which implies a short ratio of 3.39 days. The stock has gained 6.33% over the last year.
2. Annaly Capital Management, Inc. (NLY): REIT - Diversified Industry. Market cap of $10.98B. P/FCF at 1.48. RiskGrade rating at 66. Short float at 3.42%, which implies a short ratio of 1.77 days. The stock has gained 13.94% over the last year.
3. China Life Insurance Co. Ltd. (LFC): Life Insurance Industry. Market cap of $110.18B. P/FCF at 3.91. RiskGrade rating at 91. Short float at 0.25%, which implies a short ratio of 3.03 days. The stock has lost -5.85% over the last year.
4. HSBC Holdings plc (HBC): Foreign Money Center Banks Industry. Market cap of $200.74B. P/FCF at 4.04. RiskGrade rating at 104. Short float at 0.12%, which implies a short ratio of 1.92 days. The stock has gained 13.34% over the last year.