Guru Stocks With Low PS Ratio

FirstEnergy and Caterpillar are undervalued stocks held by the gurus

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Apr 19, 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.

FirstEnergy Corp. (FE) is trading at about $35.66 with a P/S ratio of 1.01 and an estimated P/E multiple of 26.22. The company has a market cap of $15.11 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 $37.05 and as low as $28.89.

The DCF model gives a fair value of $14.55, putting the stock overpriced by 145%. The Peter Lynch earnings line suggests the stock is less overpriced, giving a fair price of $20.4.

The company’s largest shareholder among the gurus is T Rowe Price Equity Income Fund (Trades, Portfolio) with 1.57% 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%.

Caterpillar Inc. (CAT) is trading at about $79.17 with a P/S ratio of 1.02 and an estimated P/E multiple 23.01. The company has a market cap of $46.1 billion and over the last 10 years, the stock has not changed. During the last 52 weeks, the price has been as high as $89.62 and as low as $56.36.

It is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.

The DCF model gives a fair value of $36.81, putting the stock overpriced by 115%. The Peter Lynch earnings line suggests the stock is less overpriced, giving a fair price of $51.6.

The company’s largest shareholder among the gurus is Bill Gates (Trades, Portfolio) with 1.93% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 1.04%, Bill Nygren (Trades, Portfolio) with 0.76%, Tom Gayner (Trades, Portfolio) with 0.05%, Steven Cohen (Trades, Portfolio) with 0.02%, Joel Greenblatt (Trades, Portfolio) with 0.02%, Manning & Napier Advisors with 0.01% and Ruane Cunniff (Trades, Portfolio) with 0.01%.

Exelon Corp. (EXCU) is trading at about $48.07 with a P/S ratio of 1.03 and an estimated P/E multiple of 13.37. The company has a market cap of $44.22 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 $50.42 and as low as $36.65.

It is a utility services holding company engaged in the energy delivery businesses.

The DCF model gives a fair value of $27.5, putting the stock overpriced by 75%. The Peter Lynch earnings line suggests the stock is less overpriced, giving a fair price of $38.5.

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 0.41%, Pioneer Investments (Trades, Portfolio) with 0.17%, Jim Simons (Trades, Portfolio) with 0.13%, Ray Dalio (Trades, Portfolio) with 0.08% and Richard Pzena (Trades, Portfolio) with 0.06%.

Manulife Financial Corp. (MFC) is trading at about $14.2 with a P/S ratio of 1.04 and an estimated P/E multiple of 17.20. The company has a market cap of $28 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.

The company is a life insurance company incorporated under the Insurance Companies Act on April 26, 1999. It provides life insurance and wealth management products and services.

The DCF model gives a fair value of $8.76, putting the stock overpriced by 62%. The Peter Lynch earnings line suggests the stock is less overpriced, giving a fair price of $12.3.

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

Cenovus Energy Inc. (CVE) is trading at about $13.43 with a P/S ratio of 1.06 and an estimated P/E multiple of 25.34. The company has a market cap of $11.19 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 $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 148%. The Peter Lynch earnings line suggests the stock is less overpriced, giving a fair price of $7.7.

First Eagle Investment (Trades, Portfolio) is the largest shareholder of the company 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%, Jeremy Grantham (Trades, Portfolio) with 0.04% and Ray Dalio (Trades, Portfolio) with 0.03%.

The Hartford Financial Services Group Inc. (HIG) is trading at about $45.92 with a P/S ratio of 1.07 and an estimated P/E multiple of 11.63. The company has a market cap of $18.22 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 company is an insurance and financial services company that is engaged in property and casualty insurance and investment products to both individual and business customers in the U.S.

The DCF model gives a fair value of $42.06, putting the stock overpriced by 9%. The Peter Lynch earnings line suggests the stock is undervalued giving a fair price of $59.0.

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%.