Started in Los Angeles in 1980, Hotchkis and Wiley has focused exclusively on finding and owning undervalued companies that have a significant potential for appreciation.
Web Page:Â http://www.hwcm.com/
Hotchkis and Wiley are value investors focusing on important investment parameters such as a company's tangible assets, sustainable cash flow, and potential for improving business performance.
According to Guru Focus Undervalued Stocks on H&W portfolio the following are the four stocks with better margins of safety.
1) Humana Inc (HUM)
H&W is increasing its position in HUM on every quarter since 2013 Q1, with an average gain of 76% so far.
At current price, based on DCF model, Humana's fair value is $207.58, and these days the stock is trading with a margin of safety of 26%, at a P/E ratio of 24.60 and P/B ratio of 2.33.
Over the last five years, the company's revenue grew by 9.30% and EPS growth rate is 6.20%. This is thanks to positive returns (11% of ROE and 5% of ROA) and strong Financial situation, rated 8/10.
Other Gurus holding Humana Inc. are Vanguard Health Care Fund (3.42% of Outstanding Shares) and Larry Robbins (3.27% of Outstanding Shares)
2) Oracle Corporation (ORCL)
H&W is increasing its position in ORCL on every quarter since 2010 Q2, with an average gain of 32% so far.
At current price, based on DCF model, Oracle Corporation's fair value is $61.46, and these days the stock is trading with a margin of safety of 29%, at a P/E of 18.30 and P/B of 4.10.
Over the last 5 years, the company revenue grew by 10.60% and EPS growth rate is 18.00%. This is thanks to positive returns (23.68% of ROE, 11.84% of ROA and 486.18% of ROC) and strong Financial situation, rated 7/10.
Other Gurus holding Oracle are Jeremy Grantham (0.95% of Outstanding Shares), Donald Yacktman and James Barrow (Trades, Portfolio) (0.87% of Outstanding Shares)
3) CA Inc. (CA)
H&W is increasing its position in CA on every quarter since 2010Q2, with an average gain of 46% so far.
At current price, based on DCF model, CA fair value is $50.10, and these days the stock is trading with a margin of safety of 35%, at a P/E of 17.90 and P/B of 2.49.
Over the last 5 years, the company revenue grew by 6.40%, EPS grew by 9.30%. Returns are the best of the Global Software – Infrastructure industry, with a ROE of 14.12%, a ROA of 6.94% and a ROC of 482.02%. Financial strength is rated 6/10.
Other Gurus holding CA Inc. are James Barrow (2.65% of Outstanding Shares) and NWQ Managers (1.47% of Outstanding Shares)
4) Cummins Inc (CMI)
H&W is increasing its position in CMI on every quarter since 2011 Q2, with an average gain of 31% so far.
At current price, based on DCF model, CMI fair value is $217.65, and these days the stock is trading with a margin of safety of 36%, at a P/E ratio of 15.60 and P/B of 3.28.
Over the last 5 years the company Revenue grew by 14.60%, EPS grew by 36.20%. Returns are the best of the Global Diversified Industrials industry, with a ROE of 21.64%, a ROA of 10.81% and a ROC of 39.15%. Financial strength is rated 8/10.
Other Gurus holding Cummins Inc. are David Rolfe (0.75% of Outstanding Shares) and Pioneer Investments (0.62% of Outstanding Shares)
