As of Thursday, the GuruFocus All-in-One Screener found the following stocks have low price-earnings ratios and have been bought by gurus. While some of them are great investments, others need to be checked again, according to the discounted cash flow calculator.
American Eagle Outfitters
With a market cap of $2.44 billion, American Eagle Outfitters Inc. (AEO, Financial) is trading with a price-earnings ratio of 9.62. According to the DCF calculator, the stock has a fair value of $16.27 while trading at about $14.8. The share price has fallen 19% over the last 12 months and is now 39.75% below the 52-week high and 7.17% above the 52-week low.
The apparel and accessories retailer has a GuruFocus profitability and growth rating of 8 out of 10. The return on equity of 20.8% and return on assets of 9.41% are outperforming 85% of companies in the retail – cyclical industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.16 is below the industry median of 0.46.
The company’s largest guru shareholder is Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 3.23% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 0.87% and Philippe Laffont (Trades, Portfolio) with 0.13%.
Vermilion Energy
With a $2.43 billion market cap, Vermilion Energy Inc. (VET, Financial) is trading with a price-earnings ratio of 8.27. According to the DCF calculator, the stock has a fair value of $19.8 while trading at $15.66. The share price has fallen 26% over the past 12 months.
GuruFocus gives the international oil and gas producer a profitability and growth rating of 7 out of 10. The return on equity of 13.38% and return on assets of 5.83% are outperforming 78% of companies in the oil and gas industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 0.01 is below the industry median of 0.35.
Simons' firm is the company’s largest guru shareholder with 0.12% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.05% and Joel Greenblatt (Trades, Portfolio) with 0.02%.
Cronos Group
With a market cap of $2.39 billion, Cronos Group Inc. (CRON, Financial) is trading with a price-earnings ratio of 7.89 and a price-book ratio of 1.43. According to the DCF calculator, the stock has a fair value of $9.31 while trading at about $6.9. Shares have fallen 37.69% over the last 12 months and are now trading 72.27% below the 52-week high and 15.23% above the 52-week low.
The return on equity of 152.39% and return on assets of 84.41% are outperforming 99% of companies in the drug manufacturers industry. The cash-debt ratio of 244.06 is far above the industry median of 0.94.
The company’s largest guru shareholder is Simons’ firm with 0.03% of outstanding shares.
Washington REIT
Washington REIT (WRE, Financial) has a market cap of $2.36 billion and is trading with a price-earnings ratio of 7.05 and a price-book ratio of 1.78. Shares have risen 19.97% over the last 12 months and are currently trading 6.65% below the 52-week high and 30.14% above the 52-week low.
GuruFocus gives the real estate investment trust a profitability and growth rating of 6 out of 10. The return on equity of 30.08% and return on assets of 13.15% are outperforming 96% of companies in the REITs industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 0.01 is above the industry median of 0.06.
With 5.16% of outstanding shares, Simons’ firm is the company’s largest guru shareholder, followed by Pioneer Investments with 0.05% and Steven Cohen (Trades, Portfolio) with 0.01%.
Arena Pharmaceuticals
Arena Pharmaceuticals Inc. (ARNA, Financial) has a market cap of $2.33 billion. Its shares are trading with a price-earnings ratio of 4.32 and a price-book ratio of 2.02. According to the DCF calculator, the stock has a fair value of $306.03 while trading at $46.60. Shares have advanced 23% over a 12-month period and are currently trading 27.99% below the three-month high and 32.51% above the three-month low.
The biotechnology company has a GuruFocus profitability and growth rating of 2 out of 10. The return on equity of 58.65% and return on assets of 53.81% are outperforming 99% of companies in the biotechnology industry. Its financial strength is rated 9 out of 10. The cash-debt ratio of 15.58 doubles the industry median of 8.59.
The company’s largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 2.73% of outstanding shares, followed by Cohen with 0.31% and John Hussman (Trades, Portfolio) with 0.05%.
Noble Midstream Partners
Noble Midstream Partners LP (NBLX, Financial) has a market cap of $2.31 billion. Its shares are trading with a price-earnings ratio of 6.95 and a price-book ratio of 1.64. According to the DCF calculator, the stock has a fair value of $39.38 while trading at $25.56. Shares have fallen 18% over a 12-month period and are currently trading 36.58% below the 52-week high and 25.91% above the 52-week low.
The company, which provides crude oil, natural gas and water-related midstream services, has a GuruFocus profitability and growth rating of 7 out of 10. The return on equity of 24.81% and return on assets of 6.42% are outperforming 83% of companies in the oil and gas industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.02 is below the industry median of 0.35.
The company’s largest guru shareholder is Hotchkis & Wiley with 0.25% of outstanding shares, followed by the late T. Boone Pickens' BP Capital with 0.09%.
Disclosure: I do not own any stocks mentioned.
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