7 Guru Stocks Trading at Low Price-Earnings

Low PE stocks gurus are buying

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Oct 06, 2016
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Gurus are buying these seven stocks that are trading with a very low price-earnings (P/E) ratio. Most of them are greatly undervalued, according to the DCF calculator.

Shinhan Financial Group Co. Ltd. ADR. (SHG, Financial), with a market cap of $17.27 billion, is trading with a P/E ratio of 8.29 and a price-sales (P/S) ratio of 2.53. According to the DCF calculator, the stock has a fair value of $47 while it is trading at $36.41 with a margin of safety of 23%. The price has risen 3% during the last 12 months and is now 8.43% below its 52-week high and 25.21% above its 52-week low.

The company provides financial services. Its services include commercial banking, credit card services, securities brokerage, life insurance and asset management services.

Currently, two hedge funds are holding the company. The guru holding the largest amount of outstanding shares is Charles Brandes (Trades, Portfolio) with 0.26%.

AmTrust Financial Services Inc. (AFSI, Financial), with a market cap of $4.5 billion, is trading with a P/E ratio of 9.43 and a P/S ratio of 0.86. According to the DCF calculator, the stock has a fair value of $79.71. It is trading at about $26.34 with a margin of safety of 67%. The price has dropped by 18% during the last 12 months and is now 26.07% below its 52-week high and 11.85% above its 52-week low.

The company, through its subsidiaries, provides specialty property and casualty insurance, specialty risk and extended warranty coverage. It also provides reinsurance for personal and commercial automotive business.

Currently, two hedge funds are holding the company. The gurus with the largest holdings are RS Investment Management (Trades, Portfolio) with 0.57% and Jim Simons (Trades, Portfolio) with 0.31%.

Banco Santander Chile ADRÂ (BSAC, Financial), with a market cap of $9.71 billion, is trading with a P/E ratio of 14.08 and a P/S ratio of 3.78. According to the DCF calculator, the stock has a fair value of $20.62. It is trading at about $66 and is overpriced by 11%. The price has risen 5% during the last 12 months and is now 8.84% below its 52-week high and 31.42% above its 52-week low.

The company provides commercial and retail banking services, foreign currency loans and financial services such as management, leasing, advisory services, mutual fund management and securities brokerage.

Currently, two hedge funds hold the company. The gurus with the largest holdings are John Rogers (Trades, Portfolio) with 0.24% and Jim Simons (Trades, Portfolio) with 0.21%.

Western Refining Inc. (WNR, Financial), with a market cap of $3.02 billion, is trading with a P/E ratio of 9.95 and a P/S ratio of 0.31. According to the DCF calculator, the stock has a fair value of $29.96. It is trading at about $27.84 with a margin of safety of 7%. The price has dropped by 40% during the last 12 months and is now 41.45% below its 52-week high and 53.47% above its 52-week low.

The company is a crude oil refiner and marketer of refined products. It operates retail convenience stores that sell gasoline, diesel fuel and convenience store merchandise.

Currently, two hedge funds hold the company. The gurus with the largest holdings are Jim Simons (Trades, Portfolio) with 0.91% and Jeremy Grantham (Trades, Portfolio) with 0.23%.

GameStop Corp. Class AÂ (GME, Financial), with a market cap of $2.82 billion, is trading with a P/E ratio of 7.22 and a P/S ratio of 0.32. According to the DCF calculator, the stock has a fair value of $40.23. It is trading at about $27.13 with a margin of safety of 33%. The price has dropped by 36% during the last 12 months and is now 43.03% below its 52-week high and 11.51% above its 52-week low.

The company is a multichannel video game retailer. It sells new and pre-owned video game hardware, physical and digital video game software, accessories, as well as PC entertainment software, new and pre-owned mobile and consumer electronics products.

Currently, two hedge funds hold the company. The gurus with the largest holdings are Jim Simons (Trades, Portfolio) with 1.23% and Chuck Royce (Trades, Portfolio) with 0.09%.

Torchmark Corp. (TMK, Financial), with a market cap of $7.65 billion, is trading with a P/E ratio of 14.69 and a P/S ratio of 2.12. According to the DCF calculator, the stock has a fair value of $54.47. It is trading at about $66 and is overpriced by 17%. The price has risen by 12% during the last 12 months and is now 2.59% below its 52-week high and 31.83% above its 52-week low.

The company is an insurance holding company. It markets individual life and supplemental health insurance, and to limited extent annuities, to middle income households throughout the United States.

Currently, two hedge funds have a stake in the company. The gurus with the largest holdings are Warren Buffett (Trades, Portfolio) with 5.3% and Richard Pzena (Trades, Portfolio) with 0.71%.

Virtu Financial Inc Class A. (VIRT, Financial), with a market cap of $2.06 billion, is trading with a P/E ratio of 14.28 and a P/S ratio of 0.82. According to the DCF calculator, the stock has a fair value of $11.13. It is trading at about $14.88 and is overpriced by 14%. The price has dropped by 35% during the last 12 months and is now 42.15% below its 52-week high and 1.50% above its 52-week low.

The company is a technology-enabled market maker and liquidity provider to the global financial markets. It generates revenue by buying and selling large volumes of securities and other financial instruments and earning small bid/ask spreads.

Currently, two hedge funds hold the company. The gurus with the largest holdings are Ron Baron (Trades, Portfolio) with 1.21% and Columbia Wanger (Trades, Portfolio) with 0.68%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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