There are a number of great undervalued stocks in the stock market today. By using the ModernGrahamValuation Model, I’ve selected five undervalued stocks for Enterprising Investors  trading closest to their 52 week low. Each of these companies has been determined to be suitable for potential investing in the stock market by the Enterprising Investor according to the ModernGraham approach.
Defensive Investors are defined as investors who are not able or willing to do substantial research into individual investments in the stock market, and therefore need to select only the companies that present the least amount of risk. Enterprising Investors, on the other hand, are able to do substantial research to find the best companies to invest in and can select companies that present a moderate (though still low) amount of risk.
Defensive Investors may also be interested in reviewing 5 Undervalued Companies for the Defensive Investor Near 52 Week Lows – Aug 2016 while also conducting further research into the following companies.
Whole Foods Market, Inc. (WFM)
Whole Foods Market, Inc. (Whole Foods Market) is a retailer of natural and organic foods and grocer.
Whole Foods Market, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $0.9 in 2012 to an estimated $1.46 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 6.12% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price. (See the full valuation)
