In order to increase the likelihood to come across value opportunities, one method is to look for stocks with an enticing forward price-earnings ratio.
Thus, I have screened the market for stocks with a forward price-earnings ratio that stands lower than the S&P 500 index's historical average of 15. The S&P 500 is a benchmark for the U.S. market. Estimates of future earnings are based on data from Morningstar analysts.
Bristol-Myers Squibb Company
The first company to have a look at is Bristol-Myers Squibb Company (BMY, Financial), a New York-based drug major.
Bristol-Myers Squibb Company has a forward price-earnings ratio of 9.25 (versus the industry median of 18.07), which results from Wednesday’s share price of $56.95 and analyst expectations for EPS of $6.17 for the next full fiscal year.
The stock price has risen 17.2% in the past year for a market capitalization of $128.86 billion and a 52-week range of $42.48 to $68.34.
GuruFocus has assigned a positive rating of 5 out of 10 for the company’s financial strength and a high rating of 8 out of 10 for its profitability.
The stock holds an overweight recommendation rating on Wall Street.
Open Text Corp
The second company to have a look at is Open Text Corp (OTEX, Financial), a Canadian software company.
Open Text Corp has a forward price-earnings ratio of 13.95 (versus the industry median of 28.54), which is the result of Wednesday’s closing share price of $42.54 and analyst expectations for EPS of $3.05 for the next full fiscal year.
The stock price has risen nearly 3% in the past year for a market capitalization of $11.55 billion and a 52-week range of $29.12 to $47.85.
GuruFocus has assigned a moderate rating of 4 out of 10 to the company’s financial strength and a remarkably high rating of 9 out of 10 to its profitability.
The stock has a buy recommendation rating on Wall Street.
Progress Software Corp
The third company to have a look at is Progress Software Corp (PRGS, Financial), a Bedford, Massachusetts-based developer of application software for businesses.
Progress Software Corp has a forward price-earnings ratio of 13.89 (versus the industry median of 28.54), which is the result of Wednesday’s closing share price of $38.51 and analyst expectations of EPS of $2.77 for the next full fiscal year.
The stock price has decreased by 8.6% in the past year for a market capitalization of $1.72 billion and a 52-week range of $28.09 to $52.50.
GuruFocus has assigned a positive rating of 5 out of 10 for the company’s financial strength and a very good rating of 7 out of 10 for its profitability.
The stock has a buy recommendation rating on Wall Street.
Disclosure: I have no positions in any securities mentioned in this article.
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