Ariel Investment, founded by John Rogers (Trades, Portfolio) in 1983, is a firm that looks closely at a company's intrinsic value and its margin of safety (of at least 40%). The prices are given ample time to reflect intrinsic vlaue.
The firm currently owns 187 positions in its portfolio, valued around $8.9 billion and has a 9% quarter over quarter turnover rate.
The majority of its stocks are in the industrials sector, which consists of 23.1% of its portfolio. The second most heavily weighted sector is consumer cyclical, which makes up 20.2% of the portfolio and third is financial services, which is 19.9%.
Here's a look at the firm's top three most undervalued stocks in its portfolio.
COH consists of 0.47% of the overall portfolio with 1,013,471 shares worth $41,988,000. The company has a business predictability rating of 3.5 stars out of 5.
Coach is a company that provides modern luxury accessories and lifestyle collections. It was incorporated in 2000.
The stock is currently trading at $35.13 a share and has an intrinsic value of $80, which indicates it is currenlty undervalued by 56%.
The P/B ratio of 3.81 is currently close to its five-year low of 3.77, which is a good sign for investors.
Ariel owns 376,593 shares of EMC, worth $9.6 million. The company has a 4.5 out of 5 star business predictability rating.
EMC Corp provides a foundation for other companies to store, manage, protect, analyze and secure information and also improve business agility while lowering cost and increasing competitive advantage.
The stock is currently trading at $27.01 a share and its intrinsic value is $57, which indicates the stock may be undervalued by 53%.
The P/B ratio of 2.56 is currently close to its one-year low of 2.39, which is a good sign for investors. Another good sign is the P/S ratio of 2.20 is clsoe to its five-year low of 2.09.
Walmart Stores Inc (WMT, Financial)
The firm owns 162,937 shares of WMT, worth around $13.4 million. The company has a 4.5 out of 5 business preditability rating.
Walmart operates retail stores all over the the U.S., Africa, China, Chile, India, Japan, Mexico and the United Kingdom. The company was incorporated in 1969.
The stock is currently trading at $72.49 a share and its intrinsic value is $149, which means that WMT may currently be undervalued by 51%.
The P/E ratio of 14.9 is currently close to its three-year low of 13.7, which is a good sign for investors. Another good sign is the P/B ratio of 3.08 is currently close to its three-year low of 2.98.
For more information on Ariel Investments' portfolio, click here.
