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Alberto Abaterusso
Alberto Abaterusso
Articles (2283) 

3 Low Forward Price-Earnings Ratio Stocks for the Value Investor

Bristol-Myers Squibb Company tops the list

June 18, 2020 | About:

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 (NYSE:BMY), 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 (NASDAQ:OTEX), 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 (NASDAQ:PRGS), 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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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about gold, silver and precious metals mining industries. 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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