SeekingAlpha
I take a closer look at three companies that are favored on the Street, trade at multiples below 10x, and by my calculations have more than 25% upside. They cover diverse industries: healthcare, mining, and financials. Of the three companies, Freeport (FCX) is the favored pick on the Street, given its strong secular trends in gold and leading brand name. I similarly find that Freeport has the strongest upside. Note that all the ratings are sourced from T1 Banker.
Cigna
Cigna (CI) is rated a "buy" and trades at a respective 8.2x and 7.5x past and forward earnings, with a dividend yield of 0.1%.
Consensus estimates for Cigna's EPS forecast that it will grow by 4.4% to $5.44 in 2012, and then by 11.2% and 14.5% in the following two years. Assuming a multiple of 9.5x and a conservative 2013 EPS of $6.01, the rough intrinsic value of the stock is $57.10, implying 26.5% upside.
The company delivered a strong close to the year, with momentum across all geographies and segments. I am further optimistic about Cigna's ability to unlock revenue synergies from Health Spring in terms of expanding into Medicare... read more.
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