I’ve created a stock scoring template to help me discover the most undervalued stocks in a basket of 100 companies.
The template assigns a specific score for each independent variable of a stock. For instance a stock with a dividend yield of 4% will have a higher weighted score than one at 2%. A stock with a payout ratio higher than 50% has a lower score than one at 20%. A stock with a PE of 12 has a higher score than one at 75.
I’ve assigned a specific score to nearly 50 different variables for each stock. Here is a look at some of the metrics:
I will update this chart periodically so I can help you uncover some potential bargains, in case you’re interested.
Keep in mind, I am not a Financial Advisor, please do not consider this financial advice, it is merely for entertainment purposes. Please do your own due diligence before choosing to invest in any of these companies.
This weeks top 3 Bargain Stocks are:
#1 Essent Group (ESNT)
The Essent Group is one of those ‘Bermuda-domiciled’, but headquartered in Radnor, Pennsylvania insurance companies. They specialize in Private Mortgage Insurance, which means they collect premium typically from people who are not able to put enough down to secure a conventional mortgage. These borrowers have to look to a company like the Essent Group to buy Primary Mortgage Insurance, or PMI in order to secure the mortgage.
According to my scoring template, they are #1 out of the 100 publicly traded companies for being undervalued.
Why does the Essent Group Stock appear undervalued.
For starters, at the time of this writing, the Essent Group Stock is trading at $40.68 per share, but the analysts at Zacks and Morningstar give it a price target of $57.20, which represents a 28.88% upside potential.
Here are some other metrics which make The Essent Group attractive at this share price:
#2 Medical Properties Trust (MPW)
This Real Estate Investment Trust (REIT) is primarily focused on providing much needed capital to Hospitals. Medical Properties Trust is a global company, but the ‘lions share’ of capital, 61% to be exact, is deployed to support the healthcare industry in the United States.
What does Medical Properties Trust do?
Medical Properties Trust invests in healthcare facilities in 32 U.S. States, 7 European Countries, Australia and New Zealand. Their portfolio makeup is mainly Acute Care Facilities, but they also own Rehabilitation Hospitals and Behavior Health Facilities.
Their total portfolio value is a whopping 22.3 Billion. And like most REIT’s, their payout ratio is high, but at an adequate 72%.
It’s stock is currently trading at $14.29, and many analysts think it has a 25.50% upside growth potential in the next 12 months. Here are some other reasons it looks undervalued:
#3 Qualcomm, Inc. (QCOM)
Founded by a man named Irwin Jacobs in 1985, Qualcomm or (QUALity COMMunications) has gone on to add value to the San Diego Metropolitan area in so many ways. Not only has his company bettered the lives of nearly 45,000 employees and their families, it has provided for the building of homes, schools, and families alike.
Qualcomm Stock Target Price
As a holder of Qualcomm, it’s drop in price over the last 3-4 months has really challenged my decision to hold on to it. Each time I’m ready to set up a SELL ORDER, I reconsider by telling myself; Stop it! It pays a heck of a dividend, Analysts give it a target price of $180 which is a 30+% increase from here, and it has a 30.52% Net Operating Margin.
Qualcomm, will be just fine, not many companies have $6 Billion in cash flow in the last 12 months. It’s price is down because of geopolitical forces and the subsequent ‘nosedive’ the broader market has taken. It’s textbook ‘throw the baby out with the bathwater’.
In the News
As you may have heard CPI moved in the wrong direction.
The government, media, and all the big swinging d*@$’s had hoped for an improvement in the Consumer Price Index (CPI). After all, there is an election in less than 60 days.
Not to be, According to the Bureau of Labor Statistics, consumer prices ROSE .1 percent in August. The market reacted in kind by showing its displeasure to the tune of a one day 1100+ point drop in the Dow. Ouch!
Well, there’s always another CPI report next month!
Some of my favorite reads this week include:
This one from FIforthepeople had me in stitches until the end. It’s gratifying to know that there are indeed, young people interested in learning about personal finance and making sound financial decisions.
This one from Timothy over at theprofitdare reminded me of the value of giving. Not only giving of your ‘treasure’ as in Corintians 8:9, but also of your time and talent as well.
Ben at awealthofcommonsense.com had an exceptional quote in this post which caused me to reflect at how adept I am at recognizing the good stuff in life. And, generally I’m a ‘glass half full’ kinda guy, but for those times when it’s less than full, it important to recognize the good, as its truly better for the soul.
Thanks for letting me reflect on some of the things that caught my eye this week, I hope you’ve found value in this post, have a great week!
Jim started his real estate investing career in 2005 and enjoyed 3 good years before the Financial Crash of 2008. Jim’s been a steady equities investor for over 20 years, but really didn’t realize the power of dividends until 2015. Since then, he’s adopted an ‘if it doesn’t produce income, its not worth investing in” motto. Jim works in a sales and marketing position and has knowledge in SEO, Blog Writing, Website building, and growing a digital brand. If you’re looking to build your online presence, feel free to reach out to Jim.