Here are six stocks gurus are buying that are trading with low price-earnings (P/E) ratios. Some of them are great investments; others need a double check, according to the DCF calculator.
Infosys Ltd. ADRÂ (INFY) with a market cap of $31.86 billion is trading with a P/E ratio of 14.84 and a price-sales (P/S) ratio of 3.14. According to the DCF calculator the stock has a fair value of $21.5 while trading at about $13.94. The price has dropped by 22% during the last 12 months and is now 31.90% below its 52-week high and 1.46% above its 52-week low.
It provides end-to-end business solutions including consulting, design, development, software re-engineering, maintenance, systems integration, package evaluation and implementation and infrastructure management services.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Ken Fisher (Trades, Portfolio) with 1.03% followed by Jeremy Grantham (Trades, Portfolio) with 0.25%.
Unum Group (UNM) with a market cap of $10.67 billion is trading with a P/E ratio of 12.03 and a P/S ratio of 1.00. According to the DCF calculator the stock has a fair value of $44.4 while trading at about $45.95 overpriced by 3%. The price has risen by 61% during the last 12 months and is now 0.71% below its 52-week high and 91.54% above its 52-week low.
The company provides insurance and noninsurance services through its subsidiaries. It also provides a complementary portfolio of other insurance products.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are HOTCHKIS & WILEY with 3.66% and Donald Smith (Trades, Portfolio) with 2.93%.
Enstar Group Ltd. (ESGR) with a market cap of $3.82 billion is trading with a P/E ratio of 10.82 and a P/S ratio of 3.13. According to the DCF calculator the stock has a fair value of $333.38 while trading at about $197.15 with a margin of safety of 41%. The price has risen by 27% during the last 12 months and is now 5.83% below its 52-week high and 38.50% above its 52-week low.
The company acquires and manages insurance and reinsurance companies in runoff and portfolios of insurance and reinsurance businesses in runoff, and providing management, consulting and other services to the insurance and reinsurance industry.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Chuck Akre (Trades, Portfolio) with 7.49% and HOTCHKIS & WILEY with 2.08%.
GATX Corp. (GATX) with a market cap of $2.39 billion is trading with a P/E ratio of 9.54 and a P/S ratio of 1.73. According to the DCF calculator the stock has a fair value of $79.33 while trading at about $59.91, undervalued with a margin of safety of 24%. The price has risen by 45% during the last 12 months and is now 7.06% below its 52-week high and 56.14% above its 52-week low.
The company leases, operates, manages and remarkets long-lived used assets in the rail and marine market. It also provides leasing, shipping, asset remarketing and asset management services.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Mario Gabelli (Trades, Portfolio) with 7.33% and Jim Simons (Trades, Portfolio) with 0.36%.
Open Text Corp. (OTEX) with a market cap of $9.15 billion is trading with a P/E ratio of 7.34 and a P/S ratio of 4.48. According to the DCF calculator the stock has a fair value of $134.94 while trading at about $34.79 with a margin of safety of 45%. The price has risen by 42% during the last 12 months and is now 0.80% below its 52-week high and 65.94% above its 52-week low.
The company provides software products and services. It assists organizations in finding, utilizing and sharing business information. It is engaged in the design, development, marketing and sales of Enterprise Information Management software and solutions.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Richard Snow (Trades, Portfolio) with 0.82% and Simons with 0.23%.
Sanderson Farms Inc. (SAFM) with a market cap of $2.05 billion is trading with a P/E ratio of 10.79 and a P/S ratio of 0.71. According to the DCF calculator the stock has a fair value of $89.47 while trading at about $90.22 overpriced by 11%. The price has risen by 171% during the last 12 months and is now 9.24% below its 52-week high and 21.80% above its 52-week low.
It is a poultry processing company. The company along with its subsidiaries is engaged in the production, processing, marketing and distribution of fresh and frozen chicken products.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Simons with 2.74%, Chuck Royce (Trades, Portfolio) with 2.24% and John Hussman (Trades, Portfolio) with 0.33%.
Disclosure: I do not own any shares of any stocks mentioned in this article.
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