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5 Undervalued Stocks With a Profitable Business

Companies that have positive and steady net margins and operating margins are often good investments because they can return a solid profit to investors.

According to the GuruFocus discounted cash flow calculator as of April 27, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.

Raytheon Technologies


Raytheon Technologies Corp.'s (NYSE:RTX) net margin and operating margin have grown 8.86% and 13.46% per annum, respectively, over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 5.44% margin of safety at $64.8 per share. The price-earnings ratio is 10.18. The share price has been as high as $93.47 and as low as $40.72 in the last 52 weeks; it is currently 31.12% below its 52-week high and 58.12% above its 52-week low.

The company, which operates in the aerospace and defense industry, has a market cap of $97.44 billion and an enterprise value of $138.85 billion.

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The company's largest guru shareholder is Dodge & Cox with 1.96% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 0.87%, Daniel Loeb (Trades, Portfolio)'s Third Point with 0.60% and Ken Fisher (Trades, Portfolio) with 0.55%.

BlackRock

The net margin of BlackRock (NYSE:BLK) has grown 29.07% per annum over the past decade. The operating margin has grown 38.75%

According to the DCF calculator, the stock is undervalued with a 8.4% margin of safety at $490 per share. The price-earnings ratio is 18.19. The share price has been as high as $576.81 and as low as $323.98 in the last 52 weeks; it is currently 16.49% below its 52-week high and 48.69% above its 52-week low.

The asset manager has a market cap of $74.43 billion and an enterprise value of $74.63 billion.

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The company's largest guru shareholder is Pioneer Investments (Trades, Portfolio) with 0.19% of outstanding shares, followed by Tom Gayner (Trades, Portfolio) with 0.14% and Ken Fisher (Trades, Portfolio) with 0.08%.

Booking

Booking Holdings Inc. (NASDAQ:BKNG) has grown its net margin and operating margin by 27.25% and 35.50% annually over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 56.20% margin of safety at $1,403 per share. The price-earnings ratio is 12.40. The share price has been as high as $2,094 and as low as $110.29 in the last 52 weeks; it is currently 32.97% below its 52-week high and 26.77% above its 52-week low.

The online travel agency has a market cap of $56.88 billion and an enterprise value of $58.62 billion.

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The company's largest guru shareholder is Dodge & Cox with 3.47% of outstanding shares, followed by Pioneer Investments with 0.75%, Yacktman Asset Management (Trades, Portfolio) with 0.52% and Bill Nygren (Trades, Portfolio)'s Oakmark Fund with 0.47%.

VMware

The net margin of VMware Inc. (NYSE:VMW) has grown 16.68% per annum over the past decade. The operating margin has grown 18.83% annually over a 10-year period.

According to the DCF calculator, the stock is undervalued with an 70% margin of safety at $130 per share. The price-earnings ratio is 8.53. The share price has been as high as $206.8 and as low as $86 in the last 52 weeks; it is currently 36.58% below its 52-week high and 51.51% above its 52-week low.

The software company has a market cap of $54.54 billion and an enterprise value of $58.12 billion.

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The company's largest guru shareholder is Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.49% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 0.29%, Pioneer Investments with 0.02% and John Hussman (Trades, Portfolio) with 0.01%.

Biogen

Biogen Inc.'s (NASDAQ:BIIB) net margin and operating margin have grown 28.56% and 42.49% annually over the past 10 years.

According to the DCF calculator, the stock is undervalued with a 67.44% margin of safety at $300 per share. The price-earnings ratio is 9.28. The share price has been as high as $374.99 and as low as $215.78 in the last 52 weeks; it is currently 19.92% below its 52-week high and 39.17% above its 52-week low.

The drug manufacturer has a market cap of $49.05 billion and an enterprise value of $51.54 billion.

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With 8.73% of outstanding shares, PRIMECAP Management is the company's largest guru shareholder, followed by Simons' firm with 2.63% and the Vanguard Health Care Fund (Trades, Portfolio) with 1.81%.

Disclosure: I do not own any stocks mentioned.

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This article first appeared on GuruFocus.