Low PS Stocks That Are Still Expensive

A low PS ratio doesn't mean the stock is always a bargain

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Apr 05, 2016
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According to GuruFocus' All-in-One Screener, the following are companies with a market cap above $5 billion that are trading with a very low P/S ratio.

Progressive Corp. (PGR) is trading at about $35.48 with a P/S ratio of 1.00 and an estimated P/E multiple of 16.40. The company has a market cap of $20.73 billion and over the last 10 years, the stock has risen by 37%. During the last 52 weeks, the price has been as high as $35.50 and as low as $26.44.

The company offers a number of personal and commercial property-casualty insurance products mainly related to motor vehicles. The company's insurance subsidiaries and affiliate provide personal and commercial automobile insurance and other specialty property-casualty insurance and related services throughout the U.S.

The DCF model gives a fair value of $23.01, putting the stock overpriced by 54%. The Peter Lynch earnings line suggests a fair price of $32.30.

The company’s largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 2% of outstanding shares, followed by Diamond Hill Capital (Trades, Portfolio) with 0.78%, RS Investment Management (Trades, Portfolio) with 0.65%, Richard Pzena (Trades, Portfolio) with 0.46%, John Rogers (Trades, Portfolio) with 0.24% Jeremy Grantham (Trades, Portfolio) with 0.17% and Pioneer Investments (Trades, Portfolio) with 0.06%.

CenturyLink Inc. (CTL) is trading at about $32.18 with a P/S ratio of 1.00 and an estimated forward P/E multiple 12.80. The company has a market cap of $17.5 billion and over the last 10 years, the stock has dropped by 19%. During the last 52 weeks, the price has been as high as $37.00 and as low as $21.94.

It is an integrated communications company engaged primarily in providing an array of communications services to its residential, business, governmental and wholesale customers.

The DCF model gives a fair value of $17.02, putting the stock overpriced by 89%. The Peter Lynch earnings line suggests a fair price of $23.5.

The company’s largest shareholder among the gurus is T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.77% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 0.18%, Ray Dalio (Trades, Portfolio) with 0.14%, Steven Cohen (Trades, Portfolio) with 0.09% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.

Royal Philips NVÂ (PHG) is trading at about $28.14 with a P/S ratio of 1.00 and an estimated forward P/E multiple of 12.94. The company has a market cap of $25.81 billion and over the last 10 years, the stock has dropped by 19%. During the last 52 weeks, the price has been as high as $30.43 and as low as $23.16.

It is a diversified technology company that manufactures consumer electronics, appliances and equipments for healthcare, lighting and consumer well-being industry.

The DCF model gives a fair value of $5.18, putting the stock overpriced by 443%. The Peter Lynch earnings line suggests a fair price of $7.2.

Mason Hawkins (Trades, Portfolio) is the largest shareholder of the company among the gurus with 1.17% of outstanding shares, followed by HOTCHKIS & WILEY with 0.41%, NWQ Managers (Trades, Portfolio) with 0.31%, Meridian Funds (Trades, Portfolio) with 0.05% and Jim Simons (Trades, Portfolio) with 0.01%.

Banco Santander SAÂ (SAN) is trading at about $4.33 with a P/S ratio of 1.03 and an P/E multiple of 7.60. The company has a market cap of $61.99 billion and over the last 10 years, the stock has dropped by 71%. During the last 52 weeks, the price has been as high as $7.79 and as low as $3.69.

The company offers retail banking, wholesale banking, asset management and insurance services. Retail Banking covers customers banking businesses, including private banking.

The DCF model gives a fair value of $5.92, putting the stock undervalued with a margin of safety of 27%. The Peter Lynch earnings line suggests a fair price of $4.00.

Autoliv Inc. (ALV) is trading at about $116.12 with a P/S ratio of 1.08 and an estimated forward P/E multiple of 15.90. The company has a market cap of $10.23 billion and over the last 10 years, the stock has risen by 105%. During the last 52 weeks, the price has been as high as $132.19 and as low as $95.34.

The company is a developer, manufacturer and supplier to the automotive industry of automotive safety systems. Its products include passive safety systems and active safety systems.

The DCF model gives a fair value of $71.02, putting the stock overpriced by 64%. Even the Peter Lynch earnings line puts the stock as overpriced, giving a fair price of $77.5.

John Keeley (Trades, Portfolio) is the largest shareholder of the company among the gurus with 0.01% of outstanding shares.

Kyocera Corp. (KYO) is trading at about $42.29 with a P/S ratio of 1.14 and an estimated forward P/E multiple of 15.87. The company has a market cap of $15.51 billion and over the last 10 years, the stock has dropped by 7%. During the last 52 weeks, the price has been as high as $59.69 and as low as $38.01.

Its business originally consisted of the manufacture of ceramic parts for electronic equipment. In the 1960s, it expanded its business and technology horizontally into the design and production of fine ceramic parts, ceramic integrated circuit packages and electronic components.

The DCF model gives a fair value of $25.46, putting the stock overpriced by 66%. The Peter Lynch earnings line suggests a fair price of $34.2.

The company’s largest shareholder among the gurus is Jim Simons (Trades, Portfolio) with 0.14% of outstanding shares.

T-Mobile US Inc. (TMUS) is trading at about $39.36 with a P/S ratio of 1.01 and an estimated forward P/E multiple of 16.98. The company has a market cap of $32.21 billion and over the last 10 years, the stock has dropped by 28%. During the last 52 weeks, the price has been as high as $43.43 and as low as $31.19.

The company provides wireless communications services, including voice, messaging and data services in the postpaid, prepaid, and wholesale markets.

The DCF model gives a fair value of $8.67, putting the stock overpriced by 354%. The Peter Lynch earnings line gives a fair price of $12.3.

The company’s largest shareholder among the gurus is John Paulson (Trades, Portfolio) with 2.42% of outstanding shares, followed by George Soros (Trades, Portfolio) with 0.07%, Mario Gabelli (Trades, Portfolio) with 0.05%, Louis Moore Bacon (Trades, Portfolio) with 0.03% and Paul Tudor Jones (Trades, Portfolio) with 0.02%.