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Alberto Abaterusso
Alberto Abaterusso
Articles (2153) 

A Trio of Stocks With Low Price-Sales Ratios

Their businesses are highly profitable based on robust balance sheets

June 30, 2020 | About:

The following stocks could be of interest to investors as they represent businesses that have low price-sales ratios, high profitability and a stable financial situation.

Callon Petroleum

The first company investors may be interested in is Callon Petroleum Co. (NYSE:CPE), a Houston-based oil and gas producer.

The stock closed around $1.14 per share on June 29 for a price-sales ratio of 0.39, which is more appealing than the industry median of 0.58.

Callon Petroleum has a GuruFocus profitability rating of 7 out of 10, driven by an operating margin of 33.09% (versus the industry median of 2.99%) and a net margin of 37.61% (versus the industry median of -1.14%). Furthermore, the return on assets is 5.71% (versus the industry median of -1.97%).

The oil and gas operator has received a moderate GuruFocus rating of 4 out of 10 for its financial strength. Callon Petroleum has more debt than most of its competitors, but the company can easily stand the current financial burden.

Following an 83% decline over the past year, the stock has a market capitalization of $452.58 million and a 52-week range of 38 cents to $8.52.

Wall Street sell-side analysts recommend a hold rating for this stock.

Invesco

The second company investors may be interested in is Invesco Ltd. (NYSE:IVZ), an Atlanta-based asset management company.

The stock closed at $10.39 on June 29 for a price-sales ratio of 0.73, which is much more compelling than the industry median of 5.23.

Invesco has a GuruFocus profitability rating of 7 out of 10, driven by a return on capital of 210.35% (versus the industry median of 23.4%).

The company has received a moderate GuruFocus rating of 4 out of 10 for its financial strength. The balance sheet appears to be more levered than most of its competitors, but a high value of 11.72 for the interest coverage ratio signals that the asset management company can cover the commitment. Furthermore, a Piotroski F-Score of 6 out of 9 indicates it is a financially stable company.

As a result of a 49.4% decline over the past year, the stock has a market capitalization of $4.77 billion and a 52-week range of $6.38 to $22.18.

Wall Street sell-side analysts recommend a hold rating for this stock.

Matador Resources

The third company investors may be interested in is Matador Resources Co. (NYSE:MTDR), a Dallas-based oil and gas producer and midstream operator.

The stock closed at $8.34 per share on June 29 for a price-sales ratio of 0.9, which is less compelling than the industry median of 0.58 but is still below 1.

Matador Resources has a GuruFocus profitability rating of 7 out of 10, driven by an operating margin of 38.77% (versus the industry median of 2.99%) and a net margin of 21.2% (versus the industry median of -1.14%). The return on equity is 12.74% (versus the industry median of -2.1%) and the return on assets is 5.86% (versus the industry median of -1.97%). Furthermore, the three-year revenue growth rate is 46.4% (versus the industry median of 7.3%) and the three-year Ebitda growth rate is 105.8% (versus the industry median of 8.3%).

Matador Resources has received a moderate financial strength of 4 out of 10 from GuruFocus. The oil and gas operator has been aggressive in funding its operating activities. However, it appears that the company is able to pay back the debt. The Piotroski F-Score of 6 also supports solid financial conditions.

Following a 57.3% decline over the past year, the stock has a market capitalization of $972.09 million and a 52-week range of $1.11 to $22.25.

Wall Street sell-side analysts recommend an overweight rating, which means the stock is  forecasted to outperform either the industry or the market.

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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