Publishing Stocks Under-valued

G

Gary_McLaughlin

GCI:

Market Price: $73.34
Fundamental Value: $84.00

NYT:

Market Price: $44.85
Fundamental Value: $51.56

TRB:

Market Price: $37.87
Fundamental Value: $51.35
 

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Quote from Gary_McLaughlin:

GCI:

Market Price: $73.34
Fundamental Value: $84.00

NYT:

Market Price: $44.85
Fundamental Value: $51.56

TRB:

Market Price: $37.87
Fundamental Value: $51.35
More...

nyt market price is incorrect
 
Quote from Chagi:

Next question to ask is - why is the market discounting these stocks?
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The million dollar question. I've followed TRB the closest and it seems the stock is being avoided because TRB is aggressively seeking growth through acquisitions. The company has a history of over-paying for acquisitions and, in turn, has low returns on invested capital. The company does produce double digit returns on equity with 142.10% quarterly earnings growth, however. I believe the price of the stock outweighs the risks so I like it at these levels. This definitely isn't a company I'd hold for many years but I do believe it will be a good intermediate-term hold.

Also has a 1.60% div yield.
 
What are the metrics for being undervalued. I tend to believe that there aren't as many stocks undervalued in one sector. What was morningstar's criteria?

Also, how do you like morningstar?
 
Quote from KevinK:

What are the metrics for being undervalued. I tend to believe that there aren't as many stocks undervalued in one sector. What was morningstar's criteria?

Also, how do you like morningstar?
More...

I don't know what method Morningstar uses to calculate valuation but I've found their analysis is very good. They have a 5-star rating on TRB, NYT, and a 4-star on GCI. They are my primary source to supplement my own research.

Also, I'm always interested in how well earnings explain the variation of the stock price. In the case of TRB, the variation in earnings only explains 50% of the stock price (see following regression analysis) but it's been my experience that earnings explain more of the variation in prices at market bottoms, which I believe TRB is at. Data based on yearly results. Quarterly analysis is more reliable but too time consuming for a Sunday afternoon.

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.711132164
R Square 0.505708954
Adjusted R Square 0.435095948
Standard Error 1.188670693
Observations 9

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ANOVA
df SS MS F Significance F
Regression 1 10.11903389 10.11903389 7.161696956 0.031716406
Residual 7 9.890566112 1.412938016
Total 8 20.0096

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -2.271698568 1.573436128 -1.443781878 0.192021967 -5.992281132 1.448883997 -5.992281132 1.448883997
price 0.104455262 0.039032139 2.676134704 0.031716406 0.012158985 0.196751539 0.012158985 0.196751539
 
Quote from KevinK:

What are the metrics for being undervalued. I tend to believe that there aren't as many stocks undervalued in one sector. What was morningstar's criteria?

Also, how do you like morningstar?
More...

Kevin,

I probably didn't answer your question.

Value = (Net Income + Dep/Amort - Cap Ex) / 30-year bond rate / shares outstanding. I occasionally ignore Dep/Amort and Cap Ex when they are close together. Such was the case with TRB.
 
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