GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

New Features Released: Companies with Historically Low Price/Sales Ratios and Price/Book Ratios

January 01, 2010 | About:
insider

On this New Year’s day of the new decade, GuruFocus is pleased to release the new features of companies at historical low price/sales (P/S) and price/book (P/B) as new year’s present to our users.

Companies at Historically Low Price/Sales Ratios



As we introduced in the page of Broad Market Valuations, the single most important factor in Warren Buffett’s market valuation is the ratio of total market cap (TMC) over gross national product (GNP). He uses this ratio as a gauge to measure the overall valuation of the stock market. If you apply this ratio to the valuation of a business, it is the price/sales ratio of the company stock.

We have developed a new page which screens high quality companies sold at historical low P/S ratios. These companies have been very predictable in their business operations, their sales and earnings have consistently grown for at least the past decade. However the price/sales (P/S) ratios of these companies are less than 30% above their historical lows.

This low P/S strategy has been applied by Arnold Van Den Berg and Ken Fisher in their investing. GuruFocus has added the requirement of high business predictability to this strategy.

One interesting stock in this list is Wal-Mart (WMT). The business has been highly predictable, ranked 5-star in Business Predictability; it is likely to continue its business trend for the foreseeable future. The historical low P/S ratio is 0.46, currently it is 0.5, the stock is about 15% above its 52-week low.

For the complete list, go to high quality companies sold at historical low P/S ratios.

Companies at Historical Low Price/Book Ratios



In Ben Graham’s value strategies, book value of a company stock played an important role. However, in modern times, stocks are rarely sold at below book values, except those in the list of Ben Graham NCAV Bargains.

We have also developed a new page which screens high quality companies sold at historical low P/B ratios. These companies have been very predictable in their business operations, their sales and earnings have consistently grown for at least the past decade. However the price/book (P/B) ratios of these companies are less than 30% above their historical lows.

The first company in this list is Valero Energy Corp. (VLO). It is ranked 5-star in business predictability, and has a price/book ratio of 0.6, with a historical low of 0.48 and historical high of 3.19. The stock is only a few percent above its 52-week low. It is a recommendation of David Dreman in his most recent Forbes column (Don't Be A Chicken Little).

****

If you believe the market valuation will reverse to the mean, it is likely that the companies in these two pages will have good potential in the appreciation of market values. These companies have been consistent with their sales and earning growth. It is not guaranteed that they will continue the trends, but it is very likely that they will.

These pages are just two of the many Premium Features we have developed for GuruFocus Premium Members. If you are not a Premium Member, we invite you for a 7-day Free Trial.


Rating: 2.7/5 (39 votes)

Voters:

Comments

tkervin
Tkervin - 4 years ago
Very good....very helpful!
Jeff B. McFarlane
Jeff B. McFarlane - 4 years ago
Good stuff.

Jae Jun
Jae Jun - 4 years ago
I've created one where the result is a screen that screens the screeners and provides actual real analysis ratio and metrics

http://www.oldschoolvalue.com/stock-screener/cheap-stocks-screen/
SKSingh
SKSingh - 4 years ago


Thanks a million for creating a great screen of Low P/S, P/B, Business Predictability Rating Companies sp. for Newbie (Novive) like me.

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK