7 Good Stocks That Hold Hidden Value

In the stock market, value often is in the eye of the beholder.

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In the stock market, value often is in the eye of the beholder. At a time when many stocks seem overpriced in light of a tepid global economy and anemic growth in revenues and profits, we went hunting for businesses that offer value in ways that may not be evident from their price-earnings ratios.

To make the initial cut, companies had to show higher operating earnings in the first quarter of the calendar year than in the same period in 2015—a sign that the basic business was improving despite the disappointing economy. Next, we looked for potential catalysts to drive the company, and stock, forward over the next few years. Those might be new sources of revenue, for example, or the prospect that the market would better appreciate existing lines of business. A commitment to returning capital to shareholders, such as via dividends, was also a plus.

We found seven companies, all of which are leaders in their industries. There's no guarantee that these firms will thrive, of course. But they're all compelling ideas that would become even more attractive should their stocks get cheaper amid a broad market swoon.


Share prices and related data are as of May 17. Except for Coach, earnings per share are actual figures for 2015 and estimated figures are for 2016 and 2017. For Coach, the actual figure is for the fiscal year that ended June 2015; estimates are for the years that end June 2016 and June 2017.

Tom Petruno
Contributing Writer, Kiplinger's Personal Finance
Petruno, a former financial columnist for the Los Angeles Times, is an independent investor, writer and consultant. He lives in L.A.