EC The 10 Best Stocks For Value Investors This Week – 6/20/15

From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $2.81 in 2011 to an estimated $4.49 for 2015. This level of demonstrated growth is in line with the market’s implied estimate for earnings growth of 6.56% over the next 7-10 years.

The company’s recent earnings history shows an average annual growth in EPSmg of around 7.5%. The ModernGraham valuation model reduces such a rate to a more conservative figure, assuming some slowdown will occur, but still returns an estimate of intrinsic value falling within a margin of safety relative to the current price, indicating Accenture is fairly valued at the present time. (See the full valuation)

Chubb Corporation (CB)

500px-Chubb_Corporation_logo.svgChubb Corporation passes the initial requirements of both the Defensive Investor and the Enterprising Investor. In fact, the company passes every requirement of both investor types, which is a rare accomplishment indicative of the company’s strong financial position. As a result, all value investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

When it comes to that valuation, it is critical to consider the company’s earnings history. In this case, it has grown its EPSmg (normalized earnings) from $6.08 in 2011 to an estimated $7.63 for 2015. This is a fairly strong level of demonstrated growth, and supports the market’s implied estimate for annual earnings growth of 2.07% over the next 7-10 years.

In recent years, the company’s actual growth in EPSmg has averaged around 5.1% annually, and while the ModernGraham valuation model reduces the actual growth to a more conservative figure when making an estimate, the model still returns an estimate of intrinsic value within a margin of safety in relation to the current price, indicating that Chubb is fairly valued at the present time. (See the full valuation)

Hormel Foods Corporation (HRL)

220px-Hormel_logo.svgHormel Foods Corporation qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  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 the evaluation.  As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $1.43 in 2011 to an estimated $2.16 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 8.7% 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. (See the full valuation)

Moody’s Corporation (MCO)

200px-Moody’s_logo.svgMoody’s Corporation is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned by the high PEmg and PB ratios, while the Enterprising Investor is only concerned with the level of debt relative to the net current assets. Therefore, all Enterprising Investors should feel very comfortable proceeding with the next stage of the analysis, which is a determination of an estimate of intrinsic value.

View single page >> |

Disclaimer: The author did not hold a position in any of the companies listed in this article ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Investment Hunting 4 years ago Contributor's comment

Fantastic list of companies here. I am happy to say I won a few :-)