I evaluated 38 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 38 companies, only 10 were found to be undervalued or fairly valued and suitable for Defensive and/or Enterprising Investors.  Therefore, these companies are the best undervalued stocks of the week.

The Elite

The following companies were found to be suitable for either the Defensive Investor or Enterprising Investor and undervalued:

Kroger Company 

Kroger Co (KR) qualifies for both the Defensive Investor and the Enterprising Investor.  The Defensive Investor is only initially concerned with the  low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets.  As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.07 in 2014 to an estimated $1.96 for 2018.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.51% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Kroger Co revealed the company was trading above its Graham Number of $18.2.  The company pays a dividend of $0.45 per share, for a yield of 2%  Its PEmg (price over earnings per share – ModernGraham) was 11.52, which was below the industry average of 36.19, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $-21.75.  (See the full valuation)

LegacyTexas Financial Group Inc

LegacyTexas Financial Group Inc (LTXB) is suitable for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the  small size, insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.79 in 2013 to an estimated $1.77 for 2017.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 6.39% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into LegacyTexas Financial Group Inc revealed the company was trading above its Graham Number of $30.53.  The company pays a dividend of $0.58 per share, for a yield of 1.5%  Its PEmg (price over earnings per share – ModernGraham) was 21.28, which was above the industry average of 20.84.  (See the full valuation)

Lucara Diamond Corp 

Lucara Diamond Corp (TSE:LUC) is suitable for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the  small size, insufficient earnings stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.03 in 2013 to an estimated $0.26 for 2017.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.36% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Lucara Diamond Corp revealed the company was trading above its Graham Number of $2.24.  The company pays a dividend of $0.06 per share, for a yield of 2.1%, putting it among the best dividend paying stocks today.  Its PEmg (price over earnings per share – ModernGraham) was 11.22, which was below the industry average of 146.28, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $-0.04.  (See the full valuation)

Nielsen N.V. Ordinary Shares 

Nielsen N.V. Ordinary Shares (NLSN) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the  low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the low current ratio.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.83 in 2013 to an estimated $1.92 for 2017.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.91% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Nielsen N.V. Ordinary Shares revealed the company was trading above its Graham Number of $27.5.  The company pays a dividend of $1.21 per share, for a yield of 3.1%, putting it among the best dividend paying stocks today.  Its PEmg (price over earnings per share – ModernGraham) was 20.33, which was below the industry average of 24.68, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $-28.15.  (See the full valuation)

TFI International Inc 

TFI International Inc (TFII) qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the  low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1 in 2013 to an estimated $3 for 2017.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.38% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into TFI International Inc revealed the company was trading above its Graham Number of $26.97.  The company pays a dividend of $0.7 per share, for a yield of 2.5%, putting it among the best dividend paying stocks today.  Its PEmg (price over earnings per share – ModernGraham) was 9.26, which was below the industry average of 31.63, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $-20.36.  (See the full valuation)

T.Rowe Price Group Inc 

T. Rowe Price Group Inc (TROW) qualifies for both the Defensive Investor and the Enterprising Investor.  The Defensive Investor is only initially concerned with the  high PB ratio. The Enterprising Investor has no initial concerns.  As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $3.23 in 2013 to an estimated $4.97 for 2017.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.82% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into T. Rowe Price Group Inc revealed the company was trading above its Graham Number of $51.41.  The company pays a dividend of $2.16 per share, for a yield of 2.7%, putting it among the best dividend paying stocks today.  Its PEmg (price over earnings per share – ModernGraham) was 16.13, which was below the industry average of 21.55, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $3.21.  (See the full valuation)

Tyson Foods Inc 

Tyson Foods, Inc. (TSN) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the  low current ratio, insufficient earnings stability over the last ten years. The Enterprising Investor is only concerned with the level of debt relative to the net current assets.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.7 in 2013 to an estimated $4 for 2017.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.43% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Tyson Foods, Inc. revealed the company was trading above its Graham Number of $55.42.  The company pays a dividend of $0.6 per share, for a yield of 1%  Its PEmg (price over earnings per share – ModernGraham) was 15.37, which was below the industry average of 34.94, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $-21.1.  (See the full valuation)

The Good

The following companies were found to be suitable for the Defensive Investor or Enterprising Investor and Fairly Valued:

Dime Community Bancshares Inc (DCOM)

Dime Community Bancshares, Inc. (DCOM) is suitable for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the  small size. The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $1.22 in 2013 to an estimated $1.45 for 2017.  This level of demonstrated earnings growth supports the market’s implied estimate of 2.75% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Dime Community Bancshares, Inc. revealed the company was trading below its Graham Number of $20.94. The company pays a dividend of $0.56 per share, for a yield of 2.8%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 13.99, which was below the industry average of 20.84, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  (See the full valuation)

Old National Bancorp

Old National Bancorp (ONB) qualifies for both the Defensive Investor and the Enterprising Investor.  In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position. The Enterprising Investor has no initial concerns.  As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $0.81 in 2013 to an estimated $1.03 for 2017.  This level of demonstrated earnings growth supports the market’s implied estimate of 3.85% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Old National Bancorp revealed the company was trading below its Graham Number of $18.06. The company pays a dividend of $0.52 per share, for a yield of 3.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 16.21, which was below the industry average of 20.84, which by some methods of valuation makes it one of the most undervalued stocks in its industry.  (See the full valuation)

Telefex Inc

Teleflex Incorporated (TFX) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the  insufficient earnings stability or growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.67 in 2013 to an estimated $5.86 for 2017. This level of demonstrated earnings growth supports the market’s implied estimate of 13.91% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Teleflex Incorporated revealed the company was trading above its Graham Number of $94.71. The company pays a dividend of $1.36 per share, for a yield of 0.6%  Its PEmg (price over earnings per share – ModernGraham) was 36.32, which was below the industry average of 37.66, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-34.72. (See the full valuation)