Undervalued Stocks With Low P/S Ratio

Investment ideas from the gurus

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Mar 14, 2016
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According to GuruFocus' All-in-One Screener, the following are the stocks that are companies with a market cap above $5 billion that are trading with a very low P/S ratio.

FirstEnergy Corp. (FE) is trading at about $35 with a P/S ratio of 1.01 and an estimated forward P/E multiple of 12.69. The company has a market cap of $15.12 billion and over the last 10 years, the stock has dropped by 30%. During the last 52 weeks, the price has been as high as $37.05 and as low as $28.89.

It is a diversified energy company dedicated to safety, reliability and operational excellence. The DCF model gives a fair value of $14.66, putting the stock overpriced by 144%. The Peter Lynch earnings line suggests a fair price of $20.60.

The company’s largest shareholder among the gurus is T Rowe Price Equity Income Fund (Trades, Portfolio) with 1.97% of outstanding shares, followed by Jim Simons (Trades, Portfolio) with 0.86%, Pioneer Investments (Trades, Portfolio) with 0.22%, Ray Dalio (Trades, Portfolio) with 0.06%, Mario Gabelli (Trades, Portfolio) with 0.03% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.

Hartford Financial Services Group Inc. (HIG) is trading at about $45 with a P/S ratio of 1.04 and an estimated forward P/E multiple 10.05. The company has a market cap of $17.74 billion and over the last 10 years, the stock has dropped by 46%. During the last 52 weeks, the price has been as high as $50.95 and as low as $36.54.

The DCF model gives a fair value of $42.06, putting the stock overpriced by 6%. The Peter Lynch earnings line suggests the stock is undervalued, giving a fair price of $49.00.

The company’s largest shareholder among the gurus is Pioneer Investments (Trades, Portfolio) with 1.81% of outstanding shares, followed by Richard Snow (Trades, Portfolio) with 0.44%, Jeremy Grantham (Trades, Portfolio) with 0.23%, Richard Pzena (Trades, Portfolio) with 0.08%, Arnold Schneider (Trades, Portfolio) with 0.07%, Mario Gabelli (Trades, Portfolio) with 0.06% and Caxton Associates (Trades, Portfolio) with 0.05%.

Cenovus Energy Inc. (CVE) is trading at about $13 with a P/S ratio of 1.07 and an estimated forward P/E multiple of 416.67. The company has a market cap of $10.94 billion and over the last 10 years, the stock has dropped by 47%. During the last 52 weeks, the price has been as high as $19.72 and as low as $9.10.

The company is in the business of developing, producing and marketing crude oil, NGLs and natural gas in Canada with refining operations in the U.S.

The DCF model gives a fair value of $5.42 putting the stock overpriced by 142%. The Peter Lynch earnings line suggests a fair price of $7.7.

First Eagle Investment (Trades, Portfolio) is the largest shareholder among the gurus with 3.04% of outstanding shares, followed by Richard Pzena (Trades, Portfolio) with 0.49%, Steven Cohen (Trades, Portfolio) with 0.13%, Jim Simons (Trades, Portfolio) with 0.09% and Jeremy Grantham (Trades, Portfolio) with 0.04%.

Telefonica SAÂ (TEF) is trading at about $11.30 with a P/S ratio of 1.04 and an estimated forward P/E multiple of 11.56. The company has a market cap of $56.47 billion and over the last 10 years, the stock has dropped by 30%. During the last 52 weeks, the price has been as high as $15.54 and as low as $9.47.

The company is a telecommunications group that provides an array of services through its telecommunications networks, mainly providing fixed and mobile telephony services and present mainly in Spain, Europe and Latin America.

The company’s largest shareholder among the gurus is T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.19% of outstanding shares, followed by Manning & Napier Advisors with 0.02% and Jeff Auxier (Trades, Portfolio) with 0.01%.

Manulife Financial Corp. (MFC) is trading at about $14.26 with a P/S ratio of 1.08 and an estimated forward P/E multiple of 8.94. The company has a market cap of $28.12 billion and over the last 10 years, the stock has dropped by 56%. During the last 52 weeks, the price has been as high as $19.61 and as low as $10.99.

It provides life insurance and wealth management products and services.Â

The DCF model gives a fair value of $8.76, putting the stock overpriced by 63%. The Peter Lynch earnings line suggests a fair price of $12.00.

Jeremy Grantham (Trades, Portfolio) is the largest shareholder of the company among the gurus, with 0.17% of outstanding shares.

Exelon Corp. (EXC) is trading at about $34.73 with a P/S ratio of 1.05 and an estimated forward P/E multiple of 13.11. The company has a market cap of $31.95 billion and over the last 10 years, the stock has dropped by 37%. During the last 52 weeks, the price has been as high as $34.98 and as low as $25.09.

It is a utility services holding company engaged, through Generation, in the energy generation business, and through ComEd, PECO and BGE, in the energy delivery businesses.

The DCF model gives a fair value of $27.40, putting the stock overpriced by 27%. The Peter Lynch earnings line suggests the stock is undervalued, giving a fair price of $38.40.

The company’s largest shareholder among the gurus is Charles Brandes (Trades, Portfolio) with 0.45% of outstanding shares, followed by T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.22%, Pioneer Investments (Trades, Portfolio) with 0.17%, Jim Simons (Trades, Portfolio) with 0.13%, Ray Dalio (Trades, Portfolio) with 0.08%, Richard Pzena (Trades, Portfolio) with 0.06% and Louis Moore Bacon (Trades, Portfolio) with 0.04%.

America Movil SAB de CVÂ (AMOV) is trading at about $15.16 with a P/S ratio of 1.62 and an estimated forward P/E multiple of 8.45. The company has a market cap of $50.19 billion and over the last 10 years, the stock has dropped by 12%. During the last 52 weeks, the price has been as high as $22.29 and as low as $11.83.

The company is engaged in providing telecommunications services in 25 countries throughout the U.S., Latin America, Caribbean and Europe.

The DCF model gives a fair value of $7.52 putting the stock overpriced by 102%. The Peter Lynch earnings line suggests almost the same fair price of $7.30.