3 Stocks Trading Below Intrinsic Value

GuruFocus.com

- By Alberto Abaterusso

If in search of bargains, investors may want to have a look at the following stocks, as their share prices are trading below the intrinsic value calculated by GuruFocus' free cash flow-based discounted cash flow calculator. These stocks also have optimistic recommendation ratings amid Wall Street sell-side analysts.

Royal Bank of Canada


The first stock investors may be interested in is Royal Bank of Canada (NYSE:RY), a Toronto, Canada-based bank providing diversified financial services to consumers, households and businesses internationally.

The stock traded at $86.07 per share at close on Thursday, which is below the intrinsic value of $739.45 calculated from the DCF model, yielding a margin of safety of 88.36%.

The share price has risen by 5.74% over the past year for a market capitalization of $122.24 billion and a 52-week range of $49.55 to $86.14.

3 Stocks Trading Below Intrinsic Value
3 Stocks Trading Below Intrinsic Value

GuruFocus has assigned a score of 4 out of 10 to the company's financial strength rating and of 6 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $94 per share.

Bank of Montreal /Can/, Vanguard Group Inc and TD Asset Management Inc are among the largest top fund holders of the company, owning 4.48%, 3.02% and 2.13% of shares outstanding, respectively.

The Toronto-Dominion Bank

The second stock investors may be interested in is The Toronto-Dominion Bank (NYSE:TD), a Canadian provider of various banking products and services to households and businesses.

The stock closed at $59.50 per share on Thursday, which is lower than the DCF valuation of $989.77, yielding a 93.99% margin of safety.

The share price has risen by nearly 4% over the past year, determining a market capitalization of $107.92 billion and a 52-week range of $33.74 to $59.97.

3 Stocks Trading Below Intrinsic Value
3 Stocks Trading Below Intrinsic Value

GuruFocus has assigned a score of 3 out of 10 to the company's financial strength rating and of 6 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of hold and an average target price of $61 per share.

Royal Bank of Canada is the largest shareholder of the company with 7.96% of shares outstanding. It is followed by Bank of Montreal /Can/ with 3.78% of shares outstanding and Vanguard Group Inc with 2.99% of shares outstanding.

Universal Health Services Inc

The third stock investors may be interested in is Universal Health Services Inc (NYSE:UHS), a King of Prussia, Pennsylvania-based owner and operator of more than 400 medical care facilities in the U.S., the United Kingdom and Puerto Rico.

The stock price was $127.43 per share at close on Thursday, which is below the intrinsic value calculated from the DCF model of $230.45. The margin of safety stands at 44.70%.

The share price has declined by nearly 9% over the past year, determining a market capitalization of $10.83 billion and a 52-week range of $65.20 to $143.84.

3 Stocks Trading Below Intrinsic Value
3 Stocks Trading Below Intrinsic Value

GuruFocus has assigned a score of 5 out of 10 to the company's financial strength rating and of 8 out of 10 to its profitability rating.

On Wall Street, the stock has a recommendation rating of overweight and an average target price of $146.36 per share.

Amid the top fund holders of the company, Vanguard Group Inc is the largest with 9.77% of shares outstanding. BlackRock Inc. and Wellington Management Group LLP are the second and the third in the ranking with 6.12% and 4.30%, respectively.

Disclosure: I have no positions in any securities mentioned.

Read more here:



Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

This article first appeared on GuruFocus.

Recommended Stories

  • Results: Emera Incorporated Beat Earnings Expectations And Analysts Now Have New Forecasts

    Emera Incorporated ( TSE:EMA ) came out with its yearly results last week, and we wanted to see how the business is...

  • Canada says alleged Trump interference in extradition case of Huawei's Meng 'moot'

    Canada's attorney general says accusations that former U.S. President Donald Trump's interfered in Huawei chief financial officer Meng Wanzhou's extradition trial is irrelevant because he is no longer in office. Meng is facing charges of bank fraud in the United States over misleading HSBC about Huawei's business dealings in Iran, causing the bank to violate U.S. sanctions. She has been under house arrest in Vancouver, Canada, since her arrest at the airport there in December 2018 and is fighting extradition in the British Columbia Supreme Court.

  • In photos: India’s diverse wildlife is drowning and dying in human filth

    #InOurFilth is a public awareness campaign to draw the link between our everyday consumption and the condition of wild animals that are forced to share space with us.

  • Texas crisis has governor facing big backer: energy industry

    As frozen Texas reels under one of the worst electricity outages in U.S. history, Republican Gov. Greg Abbott has blamed grid operators and iced-over wind turbines but gone easier on another culprit: an oil and gas industry that is the state's dominant business and his biggest political contributor. “It's almost like a murder suspect blaming their right hand for committing the crime," said Democratic state Rep. James Talarico. Like most of the state's 30 million residents, Talarico's power is controlled by grid managers at the Electric Reliability Council of Texas, which Abbott again laid into Thursday after more than 4 million people at one point were enduring outages in subfreezing temperatures.

  • Bitcoin ETF Roars in Debut With $165 Million of Trading Volume

    (Bloomberg) -- North America’s first Bitcoin ETF got off to a stellar start in its debut, with investors exchanging $165 million worth of shares.After a relentless surge in the world’s largest digital currency, the first Bitcoin product that’s officially labeled an exchange-traded fund debuted Thursday in Toronto. It’s worth noting, though, that Europe has several crypto-tracking products that function like an ETF. The new fund, called Purpose Bitcoin ETF (ticker BTCC), invests directly in “physical/digital Bitcoin,” issuer Purpose Investments Inc. said in a statement.The cryptocurrency has captivated investors from billionaire Elon Musk to hedge-fund moguls including Alan Howard and Paul Tudor Jones. It may well be “the stimulus asset,” DoubleLine Capital LP chief Jeffrey Gundlach tweeted, in a reference to Bitcoin’s rally amid a wave of cash pumped into the financial system during the pandemic. While the digital asset has already surged fivefold in the past year -- spurring concern about a speculative froth in global markets --it’s grabbing more mainstream attention, especially after Tesla Inc.’s recent $1.5 billion purchase.Read: Why a U.S. Bitcoin ETF Could Be a Real Thing in 2021: QuickTakeIt’s unclear how much of the activity in BTCC will result in inflows for the fund, but the trading volumes were well above an ETF’s typical first day in Canada, according to Bloomberg Intelligence analyst James Seyffart. Although too early to tell, ETF proponents argue that such a fund will trade without the massive premiums plaguing many current Bitcoin trusts in the U.S.“There’s sizable untapped interest for a Bitcoin investment that has the benefits of an ETF,” said Todd Rosenbluth, CFRA Research’s director of ETF research, adding it’s unlikely the fund will trade at a significant premium-to-net-asset-value. “While most ETFs come to market globally with an educational hurdle to overcome, many investors are familiar with what is inside BTCC,” he noted.The U.S. currently has several active filings for a Bitcoin ETF, including the ones from VanEck Associates Corp. and Bitwise Asset Management, but the price swings notorious in cryptocurrenies and allegations of industry manipulation remain hurdles to regulator approval. Still, with the world’s largest digital trading near all-time highs and a change of leadership at the Securities and Exchange Commission, analysts say the prospect of a first American Bitcoin ETF appears to be rising.(Adds more context, current volume.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • P.K. Subban and Lindsey Vonn eye $7.2 million for Beverly Hills villa

    In Beverly Hills, athletes P.K. Subban and Lindsey Vonn are asking $7.175 million for a four-bedroom villa they bought last year for $6.75 million.

  • Stocks Drop to More Than One Week Low; Yields Rise: Markets Wrap

    (Bloomberg) -- U.S. stocks dropped to the lowest levels in more than a week and Treasury yields edged higher amid growing concern rising borrowing costs could sap a rally that’s driven equity values to historic highs.The tech-heavy Nasdaq 100 slumped 0.4%, the third consecutive decline. The energy and communication services sectors weighed on the S&P 500, which posted its biggest drop since Jan. 29. A report earlier showed initial jobless claims rose more than expected. Walmart Inc. fell 6.5% after saying it will increase spending on worker salaries and automation.“This rise in rates will certainly test the mettle and staying power of the bulls,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.Yields on 10-year Treasuries climbed as high as 1.32% before paring the increase. Yields reached the highest levels in a year earlier this week. Technology companies such as Tesla Inc., which have seen their valuations surge, are often seen as the most at risk of a pullback.“The market is starting to get a little wary of this ‘bad news is good news’ scenario,” said Matt Benkendorf, chief investment officer of Vontobel Quality Growth. “Now you’ve seen a bit of a mixed picture, which scrambles the monetary policy visibility.”In currency markets, the pound touched the strongest level versus the euro since March amid continued optimism over the nation’s vaccine rollout. The dollar weakened against Group of 10 peers. Bitcoin retreated, paring its weekly gain to 5%.Commodities were broadly higher, with lumber futures climbed to a record $1,004.90 per 1,000 board feet. Copper in London hit a fresh 8-year high as China’s traders returned from holiday with metals markets in a bullish mood.Meanwhile, the global oil market is grappling with a crisis caused by freezing temperatures in the U.S. More than 4 million barrels a day of output -- almost 40% of the nation’s crude production -- is now offline, according to traders and executives.Stocks in Asia dropped overnight, with the Hang Seng Index down 1.6% and Japan’s Topix index 1% lower.These are some of the main moves in markets:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • How Much Is Tim Allen Worth?

    Tim Allen has been a small-screen staple across several decades thanks to his hit shows "Home Improvement" and "Last Man Standing." His acting and voice work -- specifically for the "Toy Story" films...

  • How should the workplace environment change post-pandemic? Tell us

    We'd like your thoughts about how companies are prioritizing their employees' mental health in the return to the workplace.

  • 3 Money Habits to Carry Forward From the Pandemic Era

    After a year of financial precariousness for so many, those who have the means may be setting 2021 money resolutions to get back on track. According to a new survey…

  • No, Bitcoin Is Nothing Like the South Sea Bubble

    Those who compare bitcoin to the great bubbles of the past need to check the historical books. This moment is very different.

  • Reddit CEO: 'WallStreetBets would not exist if users had to reveal their full identity'

    During congressional hearings on GameStop (GME) this Thursday Reddit CEO Steven Huffman defended the social platform's practice which allows members to use aliases without disclosing their identity.

  • What Mars exploration means for international politics back on earth

    A robotic exploration mission sent by NASA will attempt to land on the Martian surface later today (tune in to watch starting at 2:15 US eastern time), catching up to two probes sent by China and the United Arab Emirates that arrived last week. China’s first trip to Mars will also attempt the difficult task of landing sometime in May or June. The arrival of all three probes at the Red planet was driven by its relative proximity to earth last year when the missions launched, but also presents a symbolic lineup: The reigning space power and its main competitor, along with a third nation outlining a new model of national space investment.

  • 4 Growth Stocks to Buy if the Stock Market Crashes

    Ready or not, a stock market crash may be brewing. If a market crash gives you the opportunity to scoop up shares of cybersecurity stock CrowdStrike Holdings (NASDAQ: CRWD) at a discount, you should absolutely jump on that opportunity.

  • I racked up debt to help my mother buy a home, car and pay household bills. I don’t even have my own car. Will I ever be free?

    ‘She is in her late 50s and it has been difficult for her to find a job. Currently, she is earning money as a care giver and doing odd jobs to get by.’

  • Myanmar protests focus on junta's economic support

    State railway workers in Myanmar continued to strike Thursday despite a police rampage the previous night targeting them in a sign of the military junta's concern over growing civil disobedience by public workers protesting the coup. Three-quarters of the country’s civil servants are on strike, all private banks are closed and the protests have weakened the economy significantly, said Tom Andrews, the independent U.N. human rights expert on Myanmar. The most important thing the international community can do now “is focused, targeted, tough economic sanctions and diplomatic pressure,” he said in an interview from Virginia, where he lives.

  • Has the Covid-19 pandemic effectively ended in India?

    The fear of Covid-19 swiftly spreading through a densely populated country was dangerously real. Nearly 11 months on, infections and fatalities in India tell a different story.

  • Big Freeze in Texas Is Becoming a Global Oil Market Crisis

    (Bloomberg) -- What began as a power issue for a handful of U.S. states is rippling into a shock for the world’s oil market.More than 4 million barrels a day of output -- almost 40% of the nation’s crude production -- is now offline, according to traders and executives. One of the world’s biggest oil refining centers has seen output drastically cut back. The waterways that help U.S. oil flow to the rest of the world have been disrupted for much of the week.“The market is underestimating the amount of oil production lost in Texas due to the bad weather,” said Ben Luckock, co-head of oil trading at commodity giant Trafigura Group.Brent crude briefly surged above $65 a barrel on Thursday, a level not seen since last January. Spreads indicating supply tightness also soared. Ten months ago, the price slumped below $16 because of a demand shock caused by Covid-19.In the past, the weather-related disruption would largely have been a U.S. issue. Now it’s unmistakably global. Crude markets in Europe are rallying as traders replace lost U.S. exports. OPEC and its allies must decide how much longer they keep millions of barrels of their supply off the market.Estimates for how long the outages may last have gotten progressively longer in recent days as analysts try to figure out the timespan involved in thawing out infrastructure, especially in those areas where freezing weather isn’t the norm.Higher EstimatesAt first, traders and consultants expected a hit to U.S. production that would last between two and three days. Now it’s looking unlikely that things will start to recover much before the weekend, and a full resumption could take weeks.That means ever more barrels are being removed from the global market. Citigroup Inc. said it expects a production loss of 16 million barrels through early March, but some trader estimates are now almost double that. Vast swaths of production in the Permian -- the heartland of U.S. shale output -- have been shut in.The result has been a surge in the value of crude barrels in other parts of the world. North Sea traders have been frantically bidding for the region’s cargoes this week as replacements are sought for U.S. crude exports. As Europe’s supplies have gotten more expensive, Asian buyers have been snapping up Middle Eastern shipments at higher premiums.And though headline crude futures are at their highest level in over a year, they’re yet to rip higher because the loss of refining capacity is equally acute. The country’s largest plant has closed, and at least 3 million barrels a day of processing got taken offline. Traders are rushing to send millions of barrels of diesel across the Atlantic to the U.S., a potential boon for Europe’s downtrodden refining industry.Gasoline Machine“The Gulf Coast is a gasoline machine and sends products across the U.S. as well as international markets,” said Kitt Haines, an analyst at consultant Energy Aspects. “For a brief period at least, this could help European refining.”The result is going to mean a mixed picture for U.S. inventories in the coming weeks. While gasoline production has been hit by the spate of refinery outages, there are also far fewer drivers on the roads than normal. Stockpiles of heating fuels like propane and diesel -- for which demand was already soaring before this week’s weather -- are set to fall sharply.All of which leaves Saudi Arabia and its allies in the Organization of Petroleum Exporting Countries keenly watching the forecast for Texas’s weather.April DecisionThe group is yet to decide on its output plans for April, but OPEC’s largest producer surprised oil markets earlier in the year by cutting an extra million barrels a day of supply in February and March. That leaves spare capacity on the sidelines at a time when the market is clamoring for extra barrels.“The market is turning into a wild animal for OPEC+ to control,” said Gary Ross, a veteran oil consultant turned hedge fund manager at Black Gold Investors LLC. He said Wednesday that he saw 5 million barrels a day of U.S. supply offline.“The weather is having an unbelievable impact on global supply and demand,” he said.A thaw is coming, though. On Friday, temperatures in Midland -- the de facto capital of shale production -- will reach 45 Fahrenheit (7 degrees Celsius). That will rise to 56 Fahrenheit on Saturday, allowing crude production to restart. On Monday, Midland hit -2 Fahrenheit, its lowest temperature in more than 30 years.For the time being, the great unknown remains how long output -- and the rest of the region’s oil infrastructure -- will take to recover in full.“Evidence from the last great Permian freeze off is that it can come back very quickly,” said Paul Horsnell, head of commodities research at Standard Chartered Plc. “But refineries are more likely to be prone to prolonged damage.”(Updates production estimate in 14th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Barclays resumes dividend as annual profit halves

    Barclays has resumed modest shareholder payouts after a year-long hiatus due to the COVID-19 pandemic, setting expectations other British lenders will follow suit when they report 2020 earnings in the next few days. The resumption came as Barclays' profit fell by half, much less than forecast as a strong performance by its investment bank offset provisions against bad loans from the economic fallout of the COVID-19 pandemic. Barclays shares, however, fell as much as 5%, after the payout plans and a vague outlook set out with no profit targets left investors underwhelmed.

  • India's Bharat Biotech pursues COVID-19 vaccine approval in over 40 countries

    India's Bharat Biotech is in the process of filing regulatory documents for approval of its COVID-19 vaccine, COVAXIN, in more than 40 countries, the company told Reuters late on Wednesday. Bharat Biotech, which last Tuesday had told Reuters it may export doses of COVAXIN to Brazil and the United Arab Emirates by the end of the week, did not name other countries and did not give exact figures on doses it expects to export. COVAXIN is one of the two vaccines approved for emergency use in India, though efficacy data from its late-stage trial is yet to be published.