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3 Stocks Trading Below the Peter Lynch Earnings Line

GuruFocus.com
·3 min read

- By Alberto Abaterusso

Value investors may want to consider the following stocks, as their share prices are trading below the Peter Lynch earnings line. This suggests that they could be undervalued. Sell-side analysts on Wall Street have also issued positive ratings for these stocks.

Enterprise Products Partners LP

The first stock to consider is Enterprise Products Partners LP (NYSE:EPD), a Houston, Texas-based oil and gas midstream operator.


The below chart shows that the share price ($19.74 at close on Dec. 28) is currently trading 36% below the Peter Lynch earnings line.

3 Stocks Trading Below the Peter Lynch Earnings Line
3 Stocks Trading Below the Peter Lynch Earnings Line

The stock price lost 29.2% over the past year through Monday, determining a market capitalization of $43.09 billion and a 52-week range of $10.27 to $29.22.

Wall Street sell-side analysts predict that the share price will trade higher over the next 12 months, rising 28.3% up to the average target price of $25.32 per share. The stock has an average buy recommendation rating.

GuruFocus has assigned a score of 4 out of 10 to the financial strength and 7 out of 10 to the profitability of the company.

Blackstone Group L.P. dominates the group of top fund holders of the company as it holds 3.21% of shares outstanding. It is followed by Harvest Fund Advisors LLC with 2.57% and GOLDMAN SACHS GROUP INC with 1.91%.

CNOOC Ltd

The second stock to consider is CNOOC Ltd (NYSE:CEO), a Hong Kong-based explorer and producer of oil and gas with operating activities primarily in China and North America.

The below chart shows that the stock price ($96.90 per share as of Dec. 28) is currently standing 50.63% below the Peter Lynch earnings line.

3 Stocks Trading Below the Peter Lynch Earnings Line
3 Stocks Trading Below the Peter Lynch Earnings Line

The stock price has decreased by 41.22% over the past year through Monday, determining a market capitalization of $43.26 billion and a 52-week range of $81.11 to $181.13.

Wall Street sell-side analysts forecast that the share price will outperform within a year, hitting a $137.03 average target price, which would be a 41.4% upside from Monday's closing price. The stock has an average buy recommendation rating.

GuruFocus has assigned a score of 6 out of 10 to the financial strength and 7 out of 10 to the profitability of the company.

Jim Simons and WELLINGTON MANAGEMENT GROUP LLP are amid the largest top fund holders of the company, owning 0.25% and 0.18%, respectively, of shares outstanding.

General Dynamics Corp

The third stock to consider is General Dynamics Corp (NYSE:GD), a Falls Church, Virginia-based aerospace and defense company.

The below chart illustrates that the stock price ($148.72 per share at close on Dec. 28) is currently trading 10% below the Peter Lynch earnings line.

3 Stocks Trading Below the Peter Lynch Earnings Line
3 Stocks Trading Below the Peter Lynch Earnings Line

The stock price lost 15.5% over the past year through Monday, which determined a market capitalization of $42.68 billion and a 52-week range of $100.55 to $190.08.

The share price is expected to perform well over the next 12 months, as Wall Street gives the stock an average target price of $163.45 and an overweight recommendation rating.

GuruFocus has assigned a score of 5 out of 10 to the financial strength and of 7 out of 10 to the profitability of the company.

LONGVIEW ASSET MANAGEMENT, LLC leads the group of the company's top fund holders, owning 11.22% of shares outstanding. It is followed by VANGUARD GROUP INC with 7.18% and Newport Trust Co with 6.77%.

Disclosure: I have no position in any security mentioned.

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This article first appeared on GuruFocus.