I did a 3 stage DCF valuation of almost 3000 stocks using my model and these assumptions:
- For years 1-5 - Expected 5 year EPS growth rate or past 5 year sales growth, whichever is lower
- For years 6-10 - half of the mentioned rate
- discount rates of 8, 10, 12 and 14%
DCF calculations work best with companies that have stable cash flows. If a business is undergoing a rapid change, or it's earnings fluctuate every year, a DCF valuation will not be very reliable. With that said, here are some companies which are cheap, compared to their earnings or growth potential.
CLICK HERE TO DOWNLOAD THE FULL LIST OF UNDERVALUED / OVERVALUED STOCKS
Below are the most undervalued stocks, and their upside with a 14% discount rate:
Ticker Name Sector Upside P/E Market cap
- For years 1-5 - Expected 5 year EPS growth rate or past 5 year sales growth, whichever is lower
- For years 6-10 - half of the mentioned rate
- discount rates of 8, 10, 12 and 14%
DCF calculations work best with companies that have stable cash flows. If a business is undergoing a rapid change, or it's earnings fluctuate every year, a DCF valuation will not be very reliable. With that said, here are some companies which are cheap, compared to their earnings or growth potential.
CLICK HERE TO DOWNLOAD THE FULL LIST OF UNDERVALUED / OVERVALUED STOCKS
Below are the most undervalued stocks, and their upside with a 14% discount rate:
Ticker Name Sector Upside P/E Market cap
| ARRS BCOR BMA BONA CNHI CSTM EOX EZPW HCI HLF KANG KED LRCX MS NOAH PDLI PEO RVT SID TTM WAC WWWW | ARRIS Group, Inc. Blucora, Inc. Banco Macro S.A. Bona Film Group Limited CNH Industrial N.V. Constellium N.V Emerald Oil, Inc. EZCORP, Inc. HCI Group, Inc. Herbalife Ltd. iKang Healthcare Group, Inc. Kayne Anderson Energy Lam Research Corporation Morgan Stanley Noah Holdings Limited PDL BioPharma, Inc. Petroleum & Resources Corp Royce Value Trust Inc. Companhia Siderurgica Nacional Tata Motors Limited Walter Investment Management Web.com Group, Inc. | Technology Technology Financial Services Industrial Goods Industrial Goods Basic Materials Financial Financial Consumer Goods Healthcare Financial Technology Financial Financial Healthcare Financial Financial Basic Materials Consumer Goods Financial Technology | 151% 170% 173% 267% 179% 187% 171% 154% 274% 163% 303% 199% 163% 182% 352% 212% 169% 183% 155% 229% 171% 167% | 45.76 26.3 5.54 65 10.8 17.59 - 40.38 8.17 11.03 - 3.65 19.56 16.29 16.22 5.98 3.47 3.04 28.62 12.7 11.54 - | 4,437.7 648.9 3,048.1 449.0 11,961.0 2,984.5 560.4 562.6 466.5 4,587.2 1,483.1 381.6 11,653.5 67,146.9 856.9 1,583.9 818.2 1,142.1 6,457.8 25,918.3 992.5 1,034.8 |
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