3 Under-the-Radar Stocks That Legendary Investor Peter Lynch Would Love

Core Insights - Peter Lynch is recognized as one of the greatest investors, achieving a 29% compounded annual growth rate (CAGR) during his tenure at Fidelity Magellan, growing assets from $20 million to $14 billion [1] - Lynch's investment philosophy focused on growth-oriented stocks at reasonable prices, contrasting with Warren Buffett's classic value investing approach [1] - Both Lynch and Buffett shared a buy-and-hold philosophy, aiming to hold stocks for extended periods [1] Company Summaries ABM Industries (ABM) - ABM Industries is a janitorial supplies and facilities management company with a history of 115 years, characterized as a steady growth company [3] - The company reported a 4% revenue growth in its first quarter, all from organic growth, with adjusted earnings per share increasing by 9% year over year [3] - Management raised its full-year earnings guidance to a range of $3.30 to $3.45 per share, up from $3.20 to $3.40 per share [3] - ABM has increased its dividend for 55 consecutive years, yielding 1.9% with a free cash flow payout ratio of 30%, indicating potential for future dividend growth [4] ACM Research (ACMR) - ACM Research specializes in wafer fabrication equipment, providing advanced cleaning technologies for chip processing [5] - The wafer fabrication equipment market is currently declining, with a 10% revenue drop last year and an expected 4% decline this year [5] - Despite a 20% loss in stock value over the past two years, forecasts indicate a significant recovery in 2025 with 10% growth driven by increased semiconductor demand [6] - ACMR derives 45.5% of its sales from Chinese chip companies, with major customers including Semiconductor Manufacturing International and other significant players in the Asian market [6] Toyota Motor (TM) - Toyota is the largest automobile manufacturer globally and is increasingly recognized as a significant player in the electric vehicle (EV) market [7] - The company has focused on hybrid vehicles, becoming the global leader in hybrid sales, while other manufacturers are shifting back to hybrids from battery electric vehicles [8] - Toyota's stock is considered undervalued, trading at less than 10 times trailing earnings and at a fraction of its sales, presenting a strong investment opportunity [8]