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6 Undervalued Stocks Growing Earnings

- By Tiziano Frateschi

Companies that are growing their earnings are often good investments because they can return a solid profit to investors. According to the discounted cash flow calculator, the following undervalued companies have grown their earnings over a five-year period.


The earnings per share of BJ's Restaurants Inc. (BJRI) have grown 21% annually over the last five years.

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According to the DCF calculator, the stock is undervalued and is trading with a 29% margin of safety at $51 per share. The price-earnings ratio 16.95. The share price has been as high as $76.50 and as low as $36.10 in the last 52 weeks; it is currently 33.03% below its 52-week high and 41.91% above its 52-week low.

The company, which owns and operates casual dining restaurants, has a market cap $1.09 billion and an enterprise value of $1.16 billion.

The company's largest guru shareholder is Ron Baron (Trades, Portfolio) with 1.81% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 1.41%, Joel Greenblatt (Trades, Portfolio) with 0.49% and Coatue Management with 0.03%.

McGrath RentCorp's (MGRC) earnings per share have grown 19% per year over the last five years.

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According to the DCF calculator, the stock is undervalued and is trading with a 40% margin of safety at $49.79 per share. The price-earnings ratio is 6.99. The share price has been as high as $68.79 and as low as $45.40 in the last 52 weeks; it is currently 27.62% below its 52-week high and 9.67% above its 52-week low.

The company, which rents out modular buildings and portable storage containers, has a market cap of $1.2 billion and an enterprise value of $1.51 billion.

With 2.79% of outstanding shares, Simons' firm is the company's largest guru shareholder, followed by Chuck Royce (Trades, Portfolio) with 1.12% and Mario Gabelli (Trades, Portfolio) with 0.11%.

The earnings per share of Big Lots Inc. (BIG) have grown 8% per year over the last five years.

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According to the DCF calculator, the stock is undervalued and is trading with a 28% margin of safety at $32 per share. The price-earnings ratio is 8.89. The share price has been as high as $59.11 and as low as $26.11 in the last 52 weeks; it is currently 45.90% below its 52-week high and 22.01% above its 52-week low.

The company, which operates discount retail stores, has a market cap of $1.28 billion and an enterprise value of $1.84 billion.

With 4.02% of outstanding shares, Richard Snow (Trades, Portfolio) is the company's largest guru shareholder, followed by Lee Ainslie (Trades, Portfolio) with 1.84%, Simons' firm with 0.83% and Louis Moore Bacon (Trades, Portfolio) with 0.62%.

Road King Infrastructure Ltd.'s (RKGXF) earnings per share have grown 15% per year over the last five years.

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According to the DCF calculator, the shares are overpriced by 68% at $1.75. The price-earnings ratio is 4.25.

The company, which develops real estate property, has a market cap of $1.34 billion and an enterprise value of $2.89 billion.

The earnings per share of Hawaiian Holdings Inc. (HA) have grown 54% per year over the last five years.

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According to the DCF calculator, the stock is undervalued and is trading with a 38% margin of safety at $30.60 per share. The price-earnings ratio is 6.69. The share price has been as high as $44.25 and as low as $24.81 in the last 52 weeks; it is currently 30.55% below its 52-week high and 23.86% above its 52-week low.

The airline has a market cap of $1.52 billion and an enterprise value of $1.64 billion.

The largest guru shareholder of the company is Royce with 2.03% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 1.8%, the Third Avenue Value Fund (Trades, Portfolio) with 1.64% and Third Avenue Management (Trades, Portfolio) with 1.16%.

Aircastle Ltd.'s (AYR) earnings per share have grown 41% per year over the last five years.

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According to the DCF calculator, the stock is overpriced by 25% at $20 per share. The price-earnings ratio is 7.85. The share price has been as high as $23.14 and as low as $15.75 in the last 52 weeks; it is currently 12.53% below its 52-week high and 28.51% above its 52-week low.

The company, which acquires, leases and sells aircraft to airlines, has a market cap of $1.54 billion and an enterprise value of $5.6 billion.

With 3.13% of outstanding shares, Diamond Hill Capital (Trades, Portfolio) is the company's largest guru shareholder, followed by Donald Smith (Trades, Portfolio) with 0.71%.

Disclosure: I do not own any stocks mentioned.

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This article first appeared on GuruFocus.