Three Overvalued Stocks with 15% Downside
There are 119 companies expected to report earnings this coming week (12/12 - 12/16) and only a few are trading well above their intrinsic value. Finbox.io fair value data shows that three of these 119 companies have a negative 15% or more margin of safety: HEICO Corp (NYSE:HEI), Nordson Corp (Nasdaq:NDSN) and ABM Industries Inc (NYSE:ABM).
HEICO is expected to report earnings on Tuesday and nine valuation models conclude that shares are approximately 35% overvalued. This is below Wall Street's consensus price target of $73.50 which implies 10% downside. The stock is currently trading near its 52-week high.
<img src='http://res.cloudinary.com/finbox/image/upload/v1481312975/1_-_NYSE_HEI_kfbgao.jpg' alt= ‘HEI finbox.io fair value estimate’>
Nordson is expected to report on Tuesday while nine separate valuation analyses imply the stock’s approximately 25% overvalued. All nine models imply a fair value below the company's current share price which has doubled within the last year.
<img src='http://res.cloudinary.com/finbox/image/upload/v1481312973/2_-_Nasdaq_NDSN_abh64f.jpg' alt= ‘NDSN finbox.io fair value estimate’>
ABM Industries is also expected to report earnings on Tuesday and appears to be trading at an 18% premium.
<img src='http://res.cloudinary.com/finbox/image/upload/v1481312971/3_-_NYSE_ABM_biaob9.jpg' alt= ‘ABM finbox.io fair value estimate’>
Two Undervalued Stocks with 10% Upside
On the opposite end of the spectrum, there are only two companies expected to report earnings this week that have 10% or more upside.
Verifone Systems Inc (NYSE:PAY) is trading at a 25% discount to fair value before earnings (expected Monday). Finbox.io's $20.42 fair value estimate is slightly above the Wall Street consensus price target of $19.88.
<img src='http://res.cloudinary.com/finbox/image/upload/v1481316832/4_-_NYSE_PAY_slyt0u.jpg' alt= ‘PAY finbox.io fair value estimate’>
Ten valuation analyses imply that Oracle Corp (NYSE:ORCL) is approximately 10% undervalued prior to reporting earnings (expected Thursday). This figure is inline with Wall Street.
<img src='http://res.cloudinary.com/finbox/image/upload/v1481316833/5_-_NYSE_ORCL_2_cugjrl.jpg' alt= ‘ORCL finbox.io fair value estimate’>
Value investors may want to take a closer look at the stocks listed above prior to them reporting earnings.