How do you know when a stock is undervalued?

It is assumed that you have been assigned the task of locating and presenting to a hedge fund portfolio manager a presentation one U.S. publicly-traded company's common stock that you think is undervalued and a U.S. publicly-traded company's common stock that you think is overvalued.

Please use the library and other available resources to locate these stocks. You may need to locate the 10-Q and 10-K statements for the companies. These reports can be retrieved on the EDGAR database of the Securities and Exchange Commission website at http://www.sec.gov/. Description of the companies Rationale of why you think the stock is undervalued Rationale of why you think the stock is overvalued The percentage you think the stock is undervalued The percentage you think the stock is overvalued An analysis of each company's management team For each of the two companies: The most current common stock price The stock's 52-week highs and lows The stock's beta For each of the two companies, the following financial ratios: Quick ratio Current ratio Inventory turnover ratio Debt ratio Debt-to-equity ratio Times interest earned ratio

Return on equity Return on assets Gross profit margin Net profit margin P/E ratio P/B ratio EPS For each of the two companies, the following estimates for the upcoming 12 months: Revenue growth rate EPS growth rate