Companies that are growing their earnings are often good investments because they can return a solid profit to investors.
According to GuruFocus' discounted cash flow calculator as of March 4, the following undervalued companies have a high margin of safety and have grown their earnings per share over a five-year period.
Alibaba Group Holding Ltd.'s (NYSE:BABA) earnings per share have grown 25.3% per annum over the past five years.
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According to the DCF calculator, the stock is undervalued with a 22% margin of safety at $212 per share. The price-earnings ratio is 22.41. The share price has been as high as $231.14 and as low as $147.95 in the last 52 weeks; it is currently 8.29% below its 52-week high and 43.27% above its 52-week low.
The world's largest e-commerce company has a market cap of $561 billion and an enterprise value of $544 billion.
With 0.56% of outstanding shares, PRIMECAP Management (Trades, Portfolio) is the company's largest guru shareholder, followed by Ken Fisher (Trades, Portfolio) with 0.49%, Frank Sands (Trades, Portfolio) with 0.40% and Steve Mandel (Trades, Portfolio) with 0.23%.
Chase
The earnings per share of Chase Corp. (CCF) have grown 7.8% per annum over the past five years.
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According to the DCF calculator, the stock is undervalued with a 6.84% margin of safety at $85.69 per share. The price-earnings ratio is 26.30. The share price has been as high as $127.5 and as low as $76.6 in the last 52 weeks; it is currently 32.79% below its 52-week high and 26.30% above its 52-week low.
The manufacturer of chemical products has a market cap of $88 million and an enterprise value of $759 million.
The company's largest guru shareholder is Jim Simons (Trades, Portfolio)' Renaissance Technologies with 4.2% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 1.85%.
GATX
GATX Corp.'s (NYSE:GATX) earnings per share have grown 10.20% per annum over the past five years.
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According to the DCF calculator, the stock is undervalued with a 21.37% margin of safety at $71.77 per share. The price-earnings ratio is 21.28. The share price has been as high as $86.01 and as low as $69.49 in the last 52 weeks; it is currently 15% below its 52-week high and 5.21% above its 52-week low.
The business services company has a market cap of $2.55 billion and an enterprise value of $7.63 billion.
The company's largest guru shareholder is Mario Gabelli (Trades, Portfolio) with 5.85% of outstanding shares, followed by Paul Tudor Jones (Trades, Portfolio) with 0.03% and Ray Dalio (Trades, Portfolio)'s Bridgewater Associates with 0.02%.
Fiat Chrysler Automobiles
The earnings per share of Fiat Chrysler Automobiles NV (NYSE:FCAU) have grown 81.80% per annum over the past five years.
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According to the DCF calculator, the stock is undervalued with a 39.9% margin of safety at $12.29 per share. The price-earnings ratio is 2.56. The share price has been as high as $16.69 and as low as $11.92 in the last 52 weeks; it is currently 26.36% below its 52-week high and 3.10% above its 52-week low.
The automaker has a market cap of $24.32 billion and an enterprise value of $21.48 billion.
The company's largest guru shareholder is Bill Nygren (Trades, Portfolio) with 1.26% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 1.03% and Mohnish Pabrai (Trades, Portfolio) with 0.42%.
Discover Financial Services
Discover Financial Services' (NYSE:DFS) earnings per share have grown 13% per annum over the past five years.
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According to the DCF calculator, the stock is undervalued with a 36.23% margin of safety at $65.94 per share. The price-earnings ratio is 7.28. The share price has been as high as $92.98 and as low as $63.24 in the last 52 weeks; it is currently 42.03% below its 52-week high and 9.85% above its 52-week low.
The bank has a market cap of $20.40 billion and an enterprise value of $39.74 billion.
With 4.14% of outstanding shares, PRIMECAP Management is the company's largest guru shareholder, followed by Diamond Hill Capital (Trades, Portfolio) with 1.05% and Hotchkis & Wiley with 1%.
Ocean Bio-Chem
The earnings per share of Ocean Bio-Chem Inc. (NASDAQ:OBCI) have grown 15.20% per annum over the past five years.
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According to the DCF calculator, the stock is undervalued with a 13.48% margin of safety at $4.23 per share. The price-earnings ratio is 14.54. The share price has been as high as $7.95 and as low as $2.9 in the last 52 weeks; it is currently 47.42% below its 52-week high and 44.14% above its 52-week low.
The company, which manufactures a broad line of appearance and maintenance products for boats, recreational vehicles and aircraft, has a market cap of $39.77 million and an enterprise value of $42.67 million.
A notable shareholder of the company is Simons' firm with 0.65% of outstanding shares.
Disclosure: I do not own any stocks mentioned.
Read more here:
5 Predictable Stocks With Margin of Safety
6 Guru Stocks Trading With Low Price-Sales Ratios
5 Stocks Near 52-Week Highs
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