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Alberto Abaterusso
Alberto Abaterusso
Articles (2478) 

A Trio of Large Cap Stocks With Low Price-Sales Ratios

Their businesses are highly profitable and based on solid financials

May 11, 2020 | About:

Investors may want to have a look at the following stocks, as they have low price-sales ratios, high profitability and good financial strength.

Fomento Economico Mexicano SAB de CV

The first company to have a look at is Fomento Economico Mexicano SAB de CV (NYSE:FMX), a Mexican bottler of Coca-Cola trademark beverages.

The stock traded at a price of $67.74 per share at close on Friday, May 8 for a price-sales ratio of 1.83. The industry median for the price-sales ratio is 1.63.

Fomento has a GuruFocus profitability rating of 8 out of 10, with a return on equity of 10.75% (versus the industry median of 7.37%), a return on total assets of 4.18% (versus the industry median of 3.46%) and a three-year Ebitda Growth rate of 84.5% (versus the industry median of 6.55%).

The company has received a positive GuruFocus rating of 5 out of 10 for its financial strength. The Piotroski F-Score of 4 indicates that the financial situation of Fomento is stable.

After a 30.7% decline over the past year, the stock now has a market cap of $121.19 billion and a 52-week range of $55.40 to $100.35.

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of 1,968 Mexican pesos ($83.10) per share.

HP Inc

The second company to have a look at is HP Inc (NYSE:HPQ), a Palo Alto, California-based computer hardware company.

The stock price traded at $15.66 per share at close on May 8 for a price-sales ratio of 0.4 versus the industry median of 0.99.

HP Inc has a GuruFocus profitability rating of 7 out of 10, a return on total assets of 9.34% (versus the industry median of 2.45%) and a return on capital of 98.82% (versus the industry median of 9.67%).

The company has received a positive GuruFocus rating of 5 out of 10 for its financial strength. The debt-to-equity ratio is -3.69 (versus the industry median of 0.3) and the Piotroski F-score of 6 out of 10, which indicates that the company's financial situation is stable.

After a 14.3% decline over the past year, the stock now has a market cap of $22.4 billion and a 52-week range of $12.54 to $23.93.

Wall Street sell-side analysts recommend a hold rating for this stock and have established an average target price of $19.17 per share.

Sodexo

The third company to have a look at is Sodexo (SDXAY), a French provider of a variety of business services.

The stock traded at $14.45 per share at close on May 8 for a price-sales ratio of 0.43 versus the industry median of 0.83.

Sodexo has a GuruFocus profitability rating of 8 out of 10. The company has a return on equity ratio of 16.23% (versus the industry median of 7.75%) and a return on capital of 98.04% (versus the industry median of 14.72%).

Sodexo has received a positive GuruFocus score of 5 out of 10 for its financial strength. The Piotroski F-Score of 6 out of 10 which indicates that Sodexo is a financially stable company.

Following a 35.2% fall over the past year, the stock now has a market capitalization of $10.55 billion and a 52-week range of $10.15 to $23.91.

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of $16.39 per share.

Disclosure: I have no positions in any securities mentioned in this article.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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