A Trio of Stocks Trading Below Intrinsic Value

A Trio of Stocks Trading Below Intrinsic Value

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- By Alberto Abaterusso

Value-oriented investors may want to consider the following securities since their shares are trading at a discount to the intrinsic value calculated by GuruFocus' earnings-based discounted cash flow calculator.

Sell-side analysts on Wall Street have also issued optimistic ratings for these stocks, indicating that share prices are expected to rise over the coming months.

Warning! GuruFocus has detected 5 Warning Sign with CI. Click here to check it out. CI 15-Year Financial DataThe intrinsic value of CIPeter Lynch Chart of CI

Cigna

The first stock that meets the criteria is Cigna Corp. (NYSE:CI), a Bloomfield, Connecticut-based health care plans company.

The stock closed at $208.18 per share on Thursday, which is lower than the intrinsic value of $223.18 from the discounted earnings model, producing a 6.7% margin of safety.

The share price has increased by only 2.5% over the past year, determining a market capitalization of $75.21 billion and a 52-week range of $118.50 to $224.96.

GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 6 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $257 per share.

T. Rowe Price Associates Inc is the company's largest shareholder with 8.24% of shares outstanding. Vanguard Group Inc has 7.90% of shares outstanding, while Blackrock Inc. holds 7.64%.

China Life Insurance

The second stock that qualifies is China Life Insurance Co. Ltd. (NYSE:LFC), a Beijing-based provider of life insurance products and several other insurance policy solutions to individuals, households and businesses in China.

The stock closed at $11.06 per share on Thursday, which stands lower than the intrinsic value of $13.66 from the discounted earnings model, for a margin of safety of 19%.

The share price decreased by 19.72% over the past year for a market capitalization of $62.52 billion and a 52-week range of $8.27 to $14.70.

GuruFocus assigned a score of 6 out of 10 to both the company's financial strength and its profitability.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $26 per share.

Northern Trust Corp. is the company's top institutional shareholder with 0.24% of shares outstanding.

HCA Healthcare

The third stock that makes the cut is HCA Healthcare Inc. (NYSE:HCA), a Nashville, Tennessee-based provider of several medical care services in the U.S.

The stock closed at $164.46 per share on Thursday, which stands lower than the intrinsic value of $195.81 from the discounted earnings model, yielding a margin of safety of 16%.