Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Umpqua Holdings Corp (UMPQ), Brooks Automation, Inc. (USA) (BRKS): 3 Undervalued Companies That Deserve Your Attention (Part 2)

It is important when investing your money in stocks that you not only purchase great performing companies, but more importantly that you buy them at a great price. Regardless of what valuation metrics you prefer, I think it is important that you try and consider all aspects of a company’s performance. To just analyze the price-to-earnings (P/E) or price-to-book values (P/B) would be naïve. Just because a company trades at low multiples does not mean it is a great value play. We need to be looking for great companies that trade at discounted prices. For one reason or another, the market has either yet to recognize or has passed over these value companies, and we as informed investors get to reap the benefits.

Value in Semiconductors

Brooks Automation, Inc. (USA) (NASDAQ:BRKS) provides automation, vacuum, and instrumentation solutions for semiconductor manufacturing, life sciences and technology device manufacturing markets worldwide. The company has no debt and currently trades at 5.9 times trailing twelve months’ earnings. Brooks Automation, Inc. (USA) (NASDAQ:BRKS) also trades at 0.96 times price/book and 1.23 times price/sales. Earnings are expected to grow at close to 18% per year for the next five years. Brooks Automation has a forward dividend yield of 3.18% with a very manageable 17% payout ratio. Brooks Automation, Inc. (USA) (NASDAQ:BRKS) combines a hefty dividend and strong earnings growth, all the while trading below book value.

Value in Regional Banks

Umpqua Holdings Corp (NASDAQ:UMPQ) operates as the holding company for Umpqua Bank and Umpqua Investments, Inc. that provide commercial, and retail banking and brokerage services to corporate, institutional, and individual customers in the United States.

Umpqua Holdings Corp (UMPQ)Umpqua Holdings Corp (NASDAQ:UMPQ) has a debt to equity of only 0.3 and currently trades at just 15.34 times forward earnings. The company also trades at just 0.87 times book value and 8.32 times free cash flow. Umpqua is expected to grow earnings 11.5% annually over the next five years. Umpqua also sports a nice dividend, which currently yields 3.17%, and their payout ratio of 42% is respectable. Umpqua Holdings Corp (NASDAQ:UMPQ)’s PEG ratio also sits at an optimal 1.33–typically a PEG between 0.8 and 1.8 mean a company is trading at a discount to its future earnings growth potential.

Value in Cloud Computing

8×8, Inc. (NASDAQ:EGHT) develops and markets telecommunications services for internet protocol (IP), telephony, and video applications. It also offers contact center, Web-based conferencing and unified communication services, as well as cloud-based computing services.