4 Stocks Trading With a Margin of Safety

Based on the discounted cash flow model, these stocks could be underestimated by the market

Summary
  • Banco Santander-Chile, LG Display, PDC Energy and Altice USA could be bargains.
  • Their share prices are below the discounted cash flow value.
  • Wall Street sell-side analysts issued positive ratings for these companies.
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When screening the market for bargains, investors could be interested in the following stocks since their share prices are trading below the intrinsic value calculated by GuruFocus' free cash flow-based discounted cash flow calculator.

Additionally, Wall Street has issued positive recommendation ratings for these companies, which means they expect higher share prices over the coming months.

Banco Santander-Chile

The first stock investors could be interested in is Banco Santander-Chile (BSAC, Financial), a Chilean regional bank providing commercial and retail banking products and services to consumers and businesses through 358 branches and 1,199 ATMs.

The stock closed at $17.72 per share on Friday, which is below the intrinsic value of $175.15 calculated from the DCF model, yielding a margin safety of 90.78%.

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The share price has risen by 22.4% over the past year, determining a market capitalization of $8.35 billion and a 52-week range of $13.86 to $26.15.

GuruFocus has assigned a score of 2 out of 10 to the company's financial strength and a 6 out of 10 rating to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $22.91 per share.

LG Display

The second stock investors could be interested in is LG Display Co. Ltd. (LPL, Financial), a South Korean manufacturer of consumer electronics that are used in televisions, computers, mobile devices and automotive displays.

The stock closed at $8.35 per share on Friday, which is below the intrinsic value of $24.40 calculated from the DCF model, yielding a margin safety of 65.78%.

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The share price has risen by 30.5% over the past year, determining a market capitalization of $5.98 billion and a 52-week range of $6.32 to $12.31.

GuruFocus has assigned a score of 4 out of 10 to the company's financial strength and 5 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $202.11 per share.

PDC Energy

The third stock investors could be interested in is PDC Energy Inc. (PDCE, Financial), a Denver-based independent explorer and producer of crude oil, natural gas and natural gas liquids in the U.S.

The stock traded at $52.31 per share at close on Friday, below the intrinsic value calculated from the DCF model of $100. The margin of safety stands at 47.69%.

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The share price has climbed 324.25% over the past year for a market capitalization of $5.16 billion and a 52-week range of $11.13 to $54.31.

GuruFocus has assigned a score of 4 out of 10 to the company's financial strength and 5 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $65.38 per share.

Altice USA

The fourth stock investors could be interested in is Altice USA Inc. (ATUS, Financial), a Long Island, New York-based provider of broadband communications and video services in North America, Puerto Rico and the Virgin Islands.

The stock traded at $16.3 per share at close on Friday, below the intrinsic value calculated from the DCF model of $53.46. The margin of safety stands at 69.51%.

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The share price has fallen 39.13% over the past year for a market capitalization of $7.45 billion and a 52-week range of $16.07 to $38.30.

GuruFocus has assigned a score of 2 out of 10 to the company's financial strength and 3 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 $31.19 per share.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure