Earnings Season: 18 Undervalued Companies on This Week’s Roster

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This week will see some very big names releasing their Q1 earnings results – have you prepared your watchlist?

One watchlist idea is to compare the price multiples of the reporting companies with their industry averages, and pick those that are relatively undervalued. Following this idea, we screened this week’s reporters for those that were undervalued to their industry peers based on TTM P/E, PEG, and TTM P/CF. The resulting list of 18 is below.

What names will your watchlist include? Use this list as a starting-off point for your own analysis into this earnings season’s reporters.

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

List sorted by market cap.

1. Exxon Mobil Corporation (XOM): Major Integrated Oil & Gas Industry. Market cap of $427.74B. Earnings to be released on 4/28/11. TTM P/E at 13.77 vs. industry avg. of 28.24. PEG ratio at 1.31 vs. industry avg. of 2.9. TTM P/CF at 9.38 vs. industry avg. of 10.17. Relatively low correlation to the market (beta = 0.49), which may be appealing to risk averse investors. The stock has gained 27.94% over the last year. (View investor sentiment on XOM)

2. Procter & Gamble Co. (PG): Personal Products Industry. Market cap of $177.21B. Earnings to be released on 4/28/11. TTM P/E at 17.36 vs. industry avg. of 17.76. PEG ratio at 1.94 vs. industry avg. of 1.97. TTM P/CF at 12.74 vs. industry avg. of 12.9. Risk-averse investors may appreciate that PG has a relatively low correlation to the market (beta = 0.51). The stock has gained 2.66% over the last year. (View investor sentiment on PG)

3. The Coca-Cola Company (KO): Beverages - Soft Drinks Industry. Market cap of $155.79B. Earnings to be released on 4/26/11. TTM P/E at 13.44 vs. industry avg. of 15.04. PEG ratio at 1.4 vs. industry avg. of 1.75. TTM P/CF at 11.8 vs. industry avg. of 14.88. Relatively low correlation to the market (beta = 0.59), which may be appealing to risk-averse investors. The stock has gained 29.84% over the last year. (View investor sentiment on KO)

4. Apache Corp. (APA): Independent Oil & Gas Industry. Market cap of $47.21B. Earnings to be released on 4/28/11. TTM P/E at 14.58 vs. industry avg. of 28.24. PEG ratio at 2.45 vs. industry avg. of 2.9. TTM P/CF at 7.07 vs. industry avg. of 10.17. The stock has gained 12.88% over the last year.

5. Hess Corporation (HES): Oil & Gas Refining & Marketing Industry. Market cap of $27.38B. Earnings to be released on 4/27/11. TTM P/E at 12.39 vs. industry avg. of 28.24. PEG ratio at 1.25 vs. industry avg. of 2.9. TTM P/CF at 5.36 vs. industry avg. of 10.17. The stock has gained 23.89% over the last year.

6. Lockheed Martin Corporation (LMT): Aerospace/Defense Products & Services Industry. Market cap of $27.19B. Earnings to be released on 4/26/11. TTM P/E at 10.82 vs. industry avg. of 17.31. PEG ratio at 1.21 vs. industry avg. of 1.74. TTM P/CF at 8.04 vs. industry avg. of 11.96. The stock has lost 7.14% over the last year.

7. General Dynamics Corp. (GD): Aerospace/Defense Products & Services Industry. Market cap of $26.98B. Earnings to be released on 4/27/11. TTM P/E at 10.6 vs. industry avg. of 17.31. PEG ratio at 1.32 vs. industry avg. of 1.74. TTM P/CF at 8.58 vs. industry avg. of 11.96. The stock has lost 5.67% over the last year.

8. Illinois Tool Works Inc. (ITW): Diversified Machinery Industry. Market cap of $26.96B. Earnings to be released on 4/26/11. TTM P/E at 17.78 vs. industry avg. of 22.25. PEG ratio at 1.45 vs. industry avg. of 1.69. TTM P/CF at 12.98 vs. industry avg. of 13.12. The stock has gained 5.94% over the last year.

9. WellPoint Inc. (WLP): Health Care Plans Industry. Market cap of $26.79B. Earnings to be released on 4/27/11. TTM P/E at 10.04 vs. industry avg. of 17.09. PEG ratio at 1.13 vs. industry avg. of 1.16. TTM P/CF at 8.63 vs. industry avg. of 11.14. The stock has gained 25.1% over the last year.

10. Norfolk Southern Corp. (NSC): Railroads Industry. Market cap of $24.83B. Earnings to be released on 4/27/11. TTM P/E at 16.67 vs. industry avg. of 21.37. PEG ratio at 1.27 vs. industry avg. of 1.55. TTM P/CF at 10.51 vs. industry avg. of 10.78. The stock has gained 11.53% over the last year.

11. Thermo Fisher Scientific, Inc. (TMO): Medical Instruments & Supplies Industry. Market cap of $21.80B. Earnings to be released on 4/27/11. TTM P/E at 22.12 vs. industry avg. of 29.84. PEG ratio at 1.83 vs. industry avg. of 1.88. TTM P/CF at 12.5 vs. industry avg. of 17.8. The stock has gained 5.96% over the last year.

12. Northrop Grumman Corporation (NOC): Conglomerates Industry. Market cap of $18.06B. Earnings to be released on 4/27/11. TTM P/E at 9.15 vs. industry avg. of 17.31. PEG ratio at 0.96 vs. industry avg. of 1.74. TTM P/CF at 6.66 vs. industry avg. of 11.96. The stock has gained 1.76% over the last year.

13. Raytheon Co. (RTN): Aerospace/Defense - Major Diversified Industry. Market cap of $17.53B. Earnings to be released on 4/28/11. TTM P/E at 10.12 vs. industry avg. of 17.31. PEG ratio at 1.24 vs. industry avg. of 1.74. TTM P/CF at 8.1 vs. industry avg. of 11.96. Risk-averse investors may appreciate that RTN has a relatively low correlation to the market (beta = 0.67). The stock has lost 15.67% over the last year.

14. Valero Energy Corp. (VLO): Oil & Gas Refining & Marketing Industry. Market cap of $16.54B. Earnings to be released on 4/26/11. TTM P/E at 17.62 vs. industry avg. of 28.24. PEG ratio at 2 vs. industry avg. of 2.9. TTM P/CF at 6.9 vs. industry avg. of 10.17. The stock has had a couple of great days, gaining 5.18% over the last week.

15. Parker Hannifin Corporation (PH): Industrial Equipment & Components Industry. Market cap of $15.63B. Earnings to be released on 4/27/11. TTM P/E at 18.48 vs. industry avg. of 22.25. PEG ratio at 1.61 vs. industry avg. of 1.69. TTM P/CF at 12.97 vs. industry avg. of 13.12. The stock has gained 38.08% over the last year.

16. Aetna Inc. (AET): Health Care Plans Industry. Market cap of $14.87B. Earnings to be released on 4/28/11. TTM P/E at 8.94 vs. industry avg. of 17.1. PEG ratio at 0.88 vs. industry avg. of 1.12. TTM P/CF at 6.81 vs. industry avg. of 11.15. Might be undervalued at current levels, with a PEG ratio at 0.84, and P/FCF ratio at 13.24. The stock has had a good month, gaining 10.5%.

17. Western Union Co. (WU): Personal Services Industry. Market cap of $13.59B. Earnings to be released on 4/26/11. TTM P/E at 15.66 vs. industry avg. of 19.54. PEG ratio at 1.32 vs. industry avg. of 1.42. TTM P/CF at 12.98 vs. industry avg. of 15.93. The stock has gained 21.85% over the last year.

18. Cerner Corporation (CERN):
Healthcare Information Services Industry. Market cap of $9.36B. Earnings to be released on 4/28/11. TTM P/E at 40.64 vs. industry avg. of 41.2. PEG ratio at 2.25 vs. industry avg. of 2.28. TTM P/CF at 21.61 vs. industry avg. of 30.73. The stock is a short squeeze candidate, with a short float at 11.98% (equivalent to 14.23 days of average volume). The stock has gained 22.64% over the last year.

*Price multiples sourced from Fidelity, earnings date and all other data sourced from Finviz. Data sourced on Friday, April 22nd. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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