6 Cheap Stocks With Low Price-Sales Ratios

Sherwin-Williams makes the list

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Mar 28, 2019
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According to the GuruFocus All-in-One Screener, the following companies with market caps over $5 billion look cheap since they are trading with low price-sales ratios.

Shares of Markel Corp. (MKL, Financial) are trading around $980 with a price-sales ratio of 1.97 and a forward price-earnings ratio of 26.25. The company, which operates in the property and casualty insurance industry, has a market cap of $13.60 million. The stock has risen at an annualized rate of 12.84% over the last 10 years.

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The insurance provider has a GuruFocus profitability and growth rating of 4 out of 10. The return on equity of -1.41% and return on assets of -0.39% are underperforming 71% of companies in the Global Insurance - Property & Casualty industry.

Chuck Akre (Trades, Portfolio) is the company's largest guru shareholder with 3.70% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 1.77% and Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 1.66%.

Graham Holdings Co. (GHC, Financial) is trading around $683.69 with a price-sales ratio of 1.36 and the price-earnings ratio of 13.59. The education and media company has a market cap of $3.63 billion. The stock has risen at an annualized rate of 12.50% over the past decade.

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The discounted cash flow calculator gives the stock a fair value of $538.29, suggesting it is overpriced by 27%. The Peter Lynch earnings line gives the stock a fair value of $1,173.

The company's largest guru shareholder is Mason Hawkins (Trades, Portfolio)’ Southeastern Asset Management with 12.22% of outstanding shares, followed by Simons’ firm with 0.69%, Mario Gabelli (Trades, Portfolio) with 0.16% and Joel Greenblatt (Trades, Portfolio) with 0.12%.

Alleghany Corp. (Y, Financial) is trading around $610 with a price-sales ratio of 1.35 and a price-earnings ratio of 232.53. The property and casualty reinsurance and insurance company has a market cap of $8.81 billion. The stock has risen at an annualized rate of 8.64% over the last 10 years.

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The DCF calculator gives the stock a fair value of $28.4, suggesting it is overpriced by 2,073%. The Peter Lynch earnings line gives the stock a fair value of $892.50.

With 4.49% of outstanding shares, First Eagle Investment (Trades, Portfolio) is the company's largest guru shareholder, followed by Chuck Royce (Trades, Portfolio) with 0.76%, Davis with 0.59% and Hotchkis & Wiley with 0.13%.

NewMarket Corp. (NEU, Financial) is trading around $436 with a price-sales ratio of 2.16 and a price-earnings ratio of 21.22. The manufacturer of petroleum additives has a market cap of $4.83 billion. The stock has risen at an annualized rate of 27.43% over the past decade.

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

The company's largest guru shareholder is Gabelli with 0.14% of outstanding shares, followed by Royce with 0.12% and Simons’ firm with 0.04%.

Shares of Sherwin-Williams Co. (SHW, Financial) are trading around $429 with a price-sales ratio of 2.32 and price-earnings ratio of 36.54. The paint manufacturer has a market cap of $39.55 billion. The stock has risen at an annualized rate of 23.80% over the last 10 years.

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The DCF calculator gives the company a fair value of $51.01, suggesting it is undervalued with a 2% margin of safety. The Peter Lynch earnings line gives the stock a fair value of $55.65.

The company's largest guru shareholder is Steven Cohen (Trades, Portfolio) with 0.09% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.07%, Diamond Hill Capital (Trades, Portfolio) with 0.02% and Ron Baron (Trades, Portfolio) with 0.02%.

BlackRock Inc. (BLK, Financial) is trading around $420 with a price-sales ratio of 4.79 and a price-earnings ratio of 15.76. The investment management company has a market cap of $66.72 billion. The stock has risen at an annualized rate of 13.81% over the past decade.

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The DCF calculator gives the company a fair value of $613.32, suggesting it is undervalued with a 32% of margin of safety. The Peter Lynch earnings line gives the stock a fair value of $522.75.

With 0.14% of outstanding shares, Pioneer Investments is the company's largest guru shareholder, followed by Tom Gayner (Trades, Portfolio) with 0.12% and Ken Fisher (Trades, Portfolio) with 0.08%.

Disclosure: I do not own any stocks mentioned.

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