5 Peter Lynch Stocks Broadly B

According to the All-in-One Screener, a Premium feature of GuruFocus, five stocks that have high

According to the All-in-One Screener, a Premium feature of GuruFocus, five stocks that have high guru buys and meet the criteria for legendary investor Peter Lynch’s Growth Screen as of Thursday are Laboratory Corp of America Holdings (LH, Financial), New Oriental Education & Technology Group Inc. (EDU, Financial), Big Lots Inc. (BIG, Financial), AerCap Holdings NV (AER, Financial) and FedEx Corp. (FDX, Financial).

GuruFocus’ Most Broadly Held Portfolio continues outperforming benchmark

GuruFocus’ Most Broadly Held Portfolio, which tracks the performance of the stocks broadly owned by investing gurus, has returned a cumulative 512.62% since its inception in 2006. The model portfolio returned an annualized 18.37% over the past 10 years and an annualized 23.20% over the past five years, outperforming the Standard & Poor’s 500 index return of an annualized 14.06% over the past 10 years and an annualized 15.65% over the past five years.

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Peter Lynch Growth Screen looks for growth stocks trading below Lynch’s earnings line

Lynch, the Fidelity Magellan Fund legend, compared a stock’s price to an earnings line at 15 times earnings per share. A stock is undervalued if the price trades below the earnings line, i.e., the price-earnings ratio is less than 15.

GuruFocus’ Peter Lynch Growth Screen also looks for stocks with a 10-year revenue growth rate of at least 6% and a business predictability rank of at least two out of five stars to account for cyclicality. Investors can find opportunities in Peter Lynch growth stocks with high guru buys: The Screener listed five companies with more than 11 gurus owning shares and at least five gurus buying shares over the past three months.

Laboratory Corp of America

Nineteen gurus own shares of Laboratory Corp of America (LH, Financial) with a combined weighting of 31.39%. Nine gurus bought shares over the past quarter, including
Andreas Halvorsen
(Trades, Portfolio)’s Viking Global Partners and
Ray Dalio
(Trades, Portfolio)’s Bridgewater Associates.

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Shares of the Burlington, North Carolina-based clinical laboratory company traded around $308.92, showing the stock is modestly overvalued based on Thursday’s price-to-GF Value ratio of 1.24.

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GuruFocus ranks the company’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and an operating margin that has increased approximately 5.70% per year on average over the past five years and outperforms more than 81% of global competitors.

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New Oriental Education

Thirteen gurus own shares of New Orientation Education (EDU, Financial) with a combined weight of 4.76%. Seven gurus purchased shares during the past quarter, including
Chris Davis
(Trades, Portfolio)’ Davis Select Advisors.

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Shares of the Beijing-based education company traded around $2.26, showing the stock is a possible value trap based on Thursday’s price-to-GF Value ratio of 0.15.

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GuruFocus ranks the company’s financial strength 4 out of 10 on the back of a weak Altman Z-score of 1.42 and debt ratios that underperform more than 55% of global competitors.

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Big Lots

Eleven gurus own shares of Big Lots (BIG, Financial) with a combined weighting of 1.26%. Six gurus purchased shares during the past quarter.

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Shares of the Columbus-based discount retailer traded around $47.95, showing the stock is fairly overvalued based on Thursday’s price-to-GF Value ratio of 0.97.

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GuruFocus ranks the company’s profitability 7 out of 10 on several positive investing signs, which include profit margins and returns that are outperforming more than 75% of global competitors and three-year revenue and earnings growth rates that top more than 76% of global discount retailers.

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AerCap Holdings

Twelve gurus own shares of AerCap Holdings (AER, Financial) with a combined weight of 19.78%. Six gurus purchased shares during the past quarter.

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Shares of the Dublin-based aircraft leasing company traded around $54.01, showing the stock is fairly valued based on Thursday’s price-to-GF Value ratio of 1.01.

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GuruFocus ranks the company’s profitability 7 out of 10 on the back of operating margins outperforming more than 86% of global competitors.

Despite good profitability, AerCap’s financial strength ranks 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a weak Altman Z-score of 0.57 and interest coverage and debt ratios that underperform more than 80% of global transportation companies.

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FedEx

Seventeen gurus own shares of FedEx (FDX, Financial) with a combined weight of 21.44%. Five gurus purchased shares during the past quarter.

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Shares of the Memphis, Tennessee-based logistics company traded around $267.09, showing the stock is modestly overvalued based on Thursday’s price-to-GF Value ratio of 1.18.

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GuruFocus ranks the company’s profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and return on equity that outperforms more than 90% of global competitors.

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