The following six stocks have low price-earnings ratios and have recently been bought by gurus. While some of them are great investments, others need to be checked again, according to the discounted cash flow calculator.
With a market cap of $5.41 billion, MKS Instruments Inc. (MKSI, Financial) is trading with a price-earnings ratio of 14.4. According to the DCF calculator, the stock has a fair value of $73.63 while trading at $99.10. The stock price has risen 38% over the last 12 months and is currently 21.19% below its 52-week high and 53.41% above its 52-week low.
GuruFocus gives the company a profitability and growth rating of 8 out of 10. Its return on equity of 25.18% and return on assets of 15.97% are outperforming 91% of companies in the Global Scientific and Technical Instruments industry. Its financial strength is rated 8 out of 10. The cash-debt ratio of 1.56 is above the industry median of 1.41.
The company’s largest shareholder among the gurus is Jim Simons (Trades, Portfolio) with 1.84% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 1.74% and Ken Fisher (Trades, Portfolio) with 1.11%.
With a market cap of $2.49 billion, Prospect Capital Corp. (PSEC, Financial) is trading with a price-earnings ratio of 10.60 and a price-sales ratio of 4.02. According to the DCF calculator, the stock has a fair value of $6.96 while trading around $6.85. The stock price has declined 16% over the last 12 months and is currently 18.16% below its 52-week high and 24.32% above its 52-week low.
GuruFocus gives the company a profitability and growth rating of 5 out of 10. The return on equity of 7.08% and the return on assets of 3.94% are underperforming 53% of companies in the Global Asset Management industry. Its financial strength is rated 5 out of 10. It has a cash-debt ratio of 0.04.
Joel Greenblatt (Trades, Portfolio) is the company’s largest guru shareholder with 0.01% of outstanding shares, followed by Paul Tudor Jones (Trades, Portfolio) with 0.01%.
With a market cap of $2.87 billion, Werner Enterprises Inc. (WERN, Financial) is trading with a price-earnings ratio of 13.40. According to the DCF calculator, the stock has a fair value of $37.88 while trading at about $39.80. The stock price has climbed 40% over the last 12 months and is currently 8.42% below its 52-week high and 42.38% above its 52-week low.
GuruFocus gives the company a profitability and growth rating of 7 out of 10. The return on equity of 19.55% and the return on assets of 12.10% are outperforming 86% of companies in the Global Trucking industry. Its financial strength is rated 8 out of 10. The cash-debt ratio of 0.52 is above the industry median of 0.35.
The company’s largest shareholder among the gurus is Royce with 0.32% of outstanding shares, followed by Barrow, Hanley, Mewhinney & Strauss with 0.24%, Simons with 0.14% and Pioneer Investments (Trades, Portfolio) with 0.03%.
Minerals Technologies Inc. (MTX, Financial), with a market cap of $2.66 billion, is trading with a price-earnings ratio of 13.4 and a price-sales ratio of 1.62. According to the DCF calculator, the stock has a fair value of $60.25 while trading at about $75.35. The stock is overpriced by 15%. The stock price is stable when compared to 12 months ago and is currently 2.53% below its 52-week high and 20.22% above its 52-week low.
GuruFocus gives the company a profitability and growth rating of 8 out of 10. The return on equity of 16.98% and return on assets of 6.78% are outperforming 61% of companies in the Global Chemicals industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.23 is below the industry median of 0.96.
With 4.01% of outstanding shares, Royce is the company’s largest guru shareholder, followed by Mario Gabelli (Trades, Portfolio) with 0.53% and Greenblatt with 0.05%.
Phillips 66 (PSX, Financial) has a market cap of $52.18 billion and an enterprise value of $65.07 billion. It is trading with a price-earnings ratio of 11.30. According to the DCF calculator, the stock has a fair value of $106.16 while trading at about $112.02. The stock price has climbed 39% over the last 12 months and is currently 8.93% below its 52-week high and 41.74% above its 52-week low.
GuruFocus gives the company a profitability and growth rating of 3 out of 10. The return on equity of 22.31% and return on assets of 9.71% are outperforming 70% of companies in the Global Oil and Gas Refining and Marketing industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.07 is above the industry median of 0.61.
The company’s largest shareholder among the gurus is Warren Buffett (Trades, Portfolio) with 9.81% of outstanding shares, followed by Barrow, Hanley, Mewhinney & Strauss with 3.14% and Pioneer Investments with 0.13%.
Cincinnati Financial Corp. (CINF, Financial) has a market cap of $11.21 billion and an enterprise value of $11.37 billion. It is trading with a price-earnings ratio of 13.86. According to the DCF calculator, the stock has a fair value of $52.33 while trading at about $68.34. The stock price has declined 5% over the last 12 months and is currently 17.33% below its 52-week high and 0.27% above its 52-week low.
GuruFocus gives the company a profitability and growth rating of 4 out of 10. The return on equity of 10.60% and the return on assets of 3.80% are outperforming 76% of companies in the Global Insurance - Property and Casualty industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.71 is below the industry median of 2.82.
First Eagle Investment (Trades, Portfolio) is the company’s largest shareholder among the gurus with 1.64% of outstanding shares, followed by Simons with 0.19% and Fisher with 0.08%.
Disclosure: I do not own any stocks mentioned in this article.
