5 Cyclical Companies Trading With Low Price-Sales Ratios

The Home Depot makes the list

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Sep 18, 2020
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According to the GuruFocus All-In-One Screener, a Premium feature, the following tech stocks were trading with low price-sales ratios as of Sept. 18.

The Home Depot

Shares of The Home Depot Inc. (HD) were trading around $285.58 with a price-sales ratio of 2.59 and a price-earnings ratio of 26.18.

The company, which provides numerous building materials, home improvement products, lawn and garden products, has a $307.41 billion market cap. The stock price has risen at an annualized rate of 26.50% over the past decade.

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The discounted cash flow calculator gives the stock a fair value of $310.59, suggesting it is trading with a margin of safety of 8.05%, while the Peter Lynch earnings line gives the stock a fair price of $124.48.

The company's largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.59% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.42% and Spiros Segalas (Trades, Portfolio) with 0.22%.

Lowe's

On Friday, Lowe's Companies Inc. (LOW) was trading around $169.03 per share with a price-sales ratio of 1.60 and a price-earnings ratio of 22.48.

The home improvement retailer has a market cap of $127.74 billion. The stock has risen at an annualized rate of 23.76% over the past 10 years.

The discounted cash flow calculator gives the stock a fair value of $151.85, suggesting it is overpriced by 11.31%, while the Peter Lynch earnings line gives the stock a fair price of $48.20.

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With 1.68% of outstanding shares, Bill Ackman (Trades, Portfolio) is the company's largest guru shareholder, followed by Barrow, Hanley, Mewhinney & Strauss with 0.64% and Andreas Halvorsen (Trades, Portfolio) with 0.23%.

TJX

TJX Companies Inc. (TJX) was trading around $56.86 on Thursday with a price-sales ratio of 2.05 and a price-earnings ratio of 99.75.

The off-price retailer has a market cap of $68.17 billion. The stock has risen at an annualized rate of 19.14% over the past decade.

The discounted cash flow calculator gives the stock a fair value of $10.57, suggesting it is overpriced by 437.94%.

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With 1.26% of outstanding shares, PRIMECAP Management (Trades, Portfolio) is the company's largest guru shareholder, followed by Diamond Hill Capital (Trades, Portfolio) with 0.47% and Jeremy Grantham (Trades, Portfolio) with 0.40%.

eBay

eBay Inc. (EBAY) was trading around $51.78 with a price-sales ratio 3.75 and a price-earnings ratio of 7.82.

The company has a market cap of $36.23 billion. The stock has climbed at an annualized rate of 17.90% over the past 10 years.

The discounted cash flow calculator gives the stock a fair value of $28.89, suggesting it is overpriced by 79.23%, while the Peter Lynch earnings line gives the stock a fair price of $26.70.

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With 4.58% of outstanding shares, Seth Klarman (Trades, Portfolio)'s The Baupost Group is the company's largest guru shareholder, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 1.90% and Paul Singer (Trades, Portfolio) with 1.24%.

O'Reilly Automotive

O'Reilly Automotive Inc. (ORLY) was trading around $477.41 per share with a price-sales ratio of 3.38 and a price-earnings ratio of 23.40.

The company, which provides aftermarket automotive parts, tools and accessories, has a market cap of $35.35 billion. The stock has risen at an annualized rate of 24.94% over the past decade.

The discounted cash flow calculator gives the stock a fair value of $580.75, suggesting it is trading with a margin of safety of 17.79%, while the Peter Lynch earnings line gives the stock a fair price of $282.74.

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The company's largest guru shareholder is Chuck Akre (Trades, Portfolio) with 2.49% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 1.28% and Diamond Hill Capital (Trades, Portfolio) with 0.44%.

Disclosure: I do not own any stocks mentioned.

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