When looking for bargains, investors may want to consider the following companies, as their price-to-median-price-sales values are low compared to the average for the S&P 500, which stands at around 1.26 as of the time of writing.
This approach is based on the idea that a stock's valuation will revert to its historical 10-year average in terms of the price-sales ratio. It requires investors to divide the current share price by the trailing 12-month revenue per share multiplied by the 10-year median price-sales ratio.
Wall Street sell-side analysts have also issued optimistic recommendation ratings for these stocks, meaning they expect higher share prices in the months ahead.
Kosmos Energy Ltd
The first stock investors may want to consider is Kosmos Energy Ltd (KOS, Financial), a Dallas, Texas-based deep-water oil and gas exploration and mining company with mineral activities spanning offshore Ghana, Equatorial Guinea and the U.S. Gulf of Mexico. The company is also developing offshore operations in Mauritania and Senegal while conducting exploration activities on proven mineral resources.
Currently, Kosmos Energy Ltd’s price-to-median-price-sales value is about 0.34, which ranks better than 90.2% of the 541 companies that operate in the oil and gas industry.
The company's revenue per share for the trailing 12 months ended in June 2022 was $4.48. Kosmos Energy Ltd has a 10-year median price-sales ratio of 4.21. Thus, the median price-sales value was $18.92 as of this writing.
Shares traded at $6.35 at close on Sept. 9 for a market capitalization of $2.89 billion and a 52-week range of $2.21 to $8.48.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 5 out of 10 to its profitability.
Wall Street issued a median recommendation rating of buy with an average target price of $9.44 per share for the stock.
Companhia Siderurgica Nacional
The second stock investors may want to consider is Companhia Siderurgica Nacional (SID, Financial), a Brazilian integrated steel producer.
Currently, Companhia Siderurgica Nacional’s price-to-median-price-sales value is about 0.59, which ranks better than 85.83% of the 381 companies that operate in the steel industry.
The revenue per share for the trailing 12 months ended June 30 was $6.13. Companhia Siderurgica Nacional has a 10-year median price-sales ratio of 0.76. Thus, its median price-sales value was $4.71 as of this writing.
The stock traded around $2.80 per share at close on Sept. 9 for a market capitalization of $3.89 billion and a 52-week range of $2.42 to $6.77.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Wall Street issued a median recommendation rating of overweight for the stock with an average target price of $4.42 per share.
Cenovus Energy Inc.
The third stock investors may want to consider is Cenovus Energy Inc. (CVE, Financial), a Canadian developer, producer and marketer of crude oil and natural gas liquids.
Currently, Cenovus Energy Inc.’s price-to-median-price-sales value is about 0.85, which ranks worse than 55.27% of the 541 companies that operate in the oil and gas industry.
The revenue per share for the trailing 12 months ended on June 30 was $25.43. Cenovus Energy Inc. has a 10-year median price-sales ratio of 0.85. Thus, its median price-sales value was $21.64 as of this writing.
The stock traded at around $18.43 per share on Sept. 9 for a market capitalization of $35.42 billion and a 52-week range of $8.18 to $24.91.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Wall Street gave the stock a median recommendation rating of buy with an average target price of about $25.72 per share.
Range Resources Corp
The fourth stock investors may want to consider is Range Resources Corp. (RRC, Financial), an independent natural gas, natural gas liquids (NGLs) and oil company headquartered in Fort Worth, Texas with 1,350 wells and approximately 794,000 acres (as of late 2021) in the Appalachian Mountains in the northeastern United States. It markets and sells its fossil fuels to utilities, processors, refiners and various companies in the midstream and downstream sectors.
Currently, Range Resources Corp.'s price-to-median-price-sales value is about 0.65, which ranks better than 66.91% of the 541 companies that operate in the oil and gas industry.
The revenue per share for the trailing 12 months ended on June 30 was $19.05. Range Resources Corp. has a 10-year median price-sales ratio of 2.50. Thus, its median price-sales value was $47.65 as of this writing.
The stock traded at around $31.11 per share on Sept. 9 for a market capitalization of $8.18 billion and a 52-week range of $16.71 to $37.44.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Wall Street gave the stock a median recommendation rating of hold with an average target price of about $40.62 per share.
