Selecting securities with compelling Shiller price-earnings ratios increases the likelihood of identifying value opportunities, in my opinion. Thus, investors may want to consider the following companies, as their Shiller price-earnings ratios are standing below the S&P 500 Index's historical average of 16.81 as of Friday, April 9.
Virtu Financial Inc
The first company to consider is Virtu Financial Inc (VIRT, Financial), a New York-based financial services company that provides global financial markets with market making and liquidity services thanks to its own multi-asset and currency technology platform.
The company has a Shiller price-earnings ratio of 13.22, which is the result of a share price of $30.94 as of April 9 and 10-year average inflation-adjusted earnings per share of $2.34 as of the December 2020 quarter. The industry has a median of 19.44 for the Shiller price-earnings ratio.
The share price has grown by 27.50% over the past year for a market capitalization of $5.95 billion and a 52-week range of $20.93 to $32.35.
GuruFocus has assigned a score of 4 out of 10 to the company's financial strength rating and of 7 out of 10 to its profitability rating.
On Wall Street, as of April, the stock has a median recommendation rating of overweight with an average target price of $31.27 per share.
PennyMac Financial Services Inc
The second company investors should consider is PennyMac Financial Services Inc (PFSI, Financial), a Westlake Village, California-based provider of mortgage banking and investment management services.
The company has a Shiller price-earnings ratio of 10.69. The ratio is the result of a share price of $58.68 as of April 9 and 10-year average inflation-adjusted earnings per share of $5.49 as of the December 2020 quarter. The industry has a median of 13.65 for the Shiller price-earnings ratio.
The share price has increased by 120.52% over the past year, determining a market capitalization of $4.06 billion and a 52-week range of $18.22 to $70.99.
GuruFocus has assigned a rating of 2 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
On Wall Street, as of April, the stock has a median recommendation rating of overweight with an average target price of $84.13 per share.
Enova International Inc
The third company under consideration is Enova International Inc (ENVA, Financial), a Chicago-based provider of various credit services to individuals, businesses and banks in North America, Brazil and Australia.
The company has a Shiller price-earnings ratio of 12.25. The ratio is the result of a share price of $34.42 as of April 9 and 10-year average inflation-adjusted earnings per share of $2.81 as of the December 2020 quarter. The industry has a median of 11.42 for the Shiller price-earnings ratio.
The share price has risen by 138% over the past year, determining a market capitalization of $1.26 billion and a 52-week range of $9.43 to $41.06.
GuruFocus has assigned a rating of 5 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
On Wall Street, as of April, the stock has a median recommendation rating of buy with an average target price of $40.25 per share.
Disclosure: I have no positions in any securities mentioned in this article.
Read more here:
- A Trio of Stocks With a History of Sales and Earnings Growth
- A Trio of Stock Picks for the Value Investor
- 3 Stocks Growing Earnings Fast
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
