6 Cheap Large-Cap Stocks

Chipote Mexican Grill among companies with low price-sales ratios

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Mar 21, 2019
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According to the GuruFocus All-in-One Screener, the following companies with market caps over $5 billion look cheap because they are trading with low price-sales ratios.

Class A shares of Chipotle Mexican Grill Inc. (CMG, Financial) are trading around $670 with a price-sales ratio of 3.83 and a price-earnings ratio of 105.51. The restaurant chain has a market cap of $18.42 billion. The stock has risen at an annualized rate of 26.98% over the last 10 years.

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The discounted cash flow calculator gives the stock a fair value of $67.53, suggesting it is overpriced by 886%. The Peter Lynch earnings line gives it a fair value of $100.80.

With 7.02% of outstanding shares, Bill Ackman (Trades, Portfolio) is the company's largest guru shareholder, followed by Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 4.48% and Spiros Segalas (Trades, Portfolio) with 1.66%.

Graham Holdings Co. (GHC, Financial) is trading around $654.24 with a price-sales ratio of 1.28 and a price-earnings ratio of 12.99. The education and media company has a market cap of $3.4 billion. The stock has risen at an annualized rate of 13.62% over the past decade.

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The DCF calculator gives the stock a fair value of $538.83, suggesting it is overpriced by 21%. The Peter Lynch earnings line gives it a fair value of $169.10.

The company's largest guru shareholder is Mason Hawkins (Trades, Portfolio) with 12.22% of outstanding shares, followed by Mario Gabelli (Trades, Portfolio) with 0.16% and Joel Greenblatt (Trades, Portfolio) with 0.12%.

Shares of Alleghany Corp. (Y, Financial) are trading around $608.41 with a price-sales ratio of 1.34 and price-earnings ratio of 232.20. The insurance company has a market cap of $8.8 billion. The stock has risen at an annualized rate of 8.8% over the last 10 years.

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The DCF calculator gives the stock a fair value of $28.04, suggesting it is overpriced by 2,070%. The Peter Lynch earnings line gives it a fair value of $892.50.

The company's largest guru shareholder is First Eagle Investment (Trades, Portfolio) with 4.49% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 0.76% and Chris Davis (Trades, Portfolio) with 0.59%.

NewMarket Corp. (NEU, Financial) is trading around $431.26 with a price-sales ratio of 2.41 and a price-earnings ratio of 21.19. The petroleum additives manufacturer has a market cap of $4.82 billion. The stock has risen at an annualized rate of 28.86% over the past decade.

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The DCF calculator gives the stock a fair value of $312.12, suggesting it is overpriced by 38%. The Peter Lynch earnings line gives it a fair value of $227.10.

With 0.14% of outstanding shares, Gabelli is the company's largest guru shareholder, followed by Royce with 0.12% and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates with 0.01%.

Seaboard Corp. (SEB, Financial) is trading around $4,100 with a price-sales ratio of 0.73 and a price-book ratio of 1.44. The transportation company has a market cap of $4.79 billion. The stock has risen at an annualized rate of 16.14% over the last 10 years.

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GuruFocus rated its profitability and growth 4 out of 10. While the return on equity of -0.5% is underperforming the sector, the return on assets of -0.32% is outperforming 73% of companies in the Global Conglomerates industry. Its financial strength is rated 7 out of 10. The cash-debt ratio of 1.65 is above the industry median of 1.66.

Kahn Brothers (Trades, Portfolio) is the company's largest guru shareholder with 0.66% of outstanding shares, followed by Simons’ firm with 0.49% and Third Avenue Management (Trades, Portfolio) with 0.14%.

Markel Corp. (MKL, Financial) is trading around $987.88 with a price-sales ratio of 1.97 and the price-book ratio of 1.53. The property and casualty insurance provider has a market cap of $13.71 billion. The stock has risen at an annualized rate of 15.09% over the past decade.

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GuruFocus rated its profitability and growth 4 out of 10. The return on equity of -1.41% and return on assets of -0.39% are underperforming 62% of companies in the Global Insurance - Property and Casualty industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.67 is below the industry median of 2.82.

The company's largest guru shareholder is Chuck Akre (Trades, Portfolio) with 3.70% of outstanding shares, followed by Davis with 1.77%, Simons’ firm with 1.66% and Murray Stahl (Trades, Portfolio) with 0.15%.

Disclosure: I do not own any stocks mentioned.

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