Value investors may want to consider the following companies, as they have low price-sales ratios, high profitability and solid financial conditions. These three aspects increase the likelihood that these stocks could be value opportunities.
Omnicom Group Inc
The first company investors may want to consider is Omnicom Group Inc OMC, a New York-based advertising agency that provides corporations with advertising, marketing and communication services.
The stock was trading at $52.55 per share at close on Aug. 21 for a price-sales ratio of 0.82, which is more compelling than the industry median of 1.12.
Omnicom Group Inc has a GuruFocus profitability rating of 8 out of 10, driven by a return on equity (ROE) ratio of 37.3% versus the industry median of 1.1% and a return on capital ratio of 81.96% versus the industry median of 8.04%.
The company has received a positive GuruFocus financial strength rating of 5 out of 10, driven by a return on invested capital (ROIC) of 7.40% exceeding the weighted average cost of capital (WACC) of 3.95%. This means that Omnicom Group is able to invest funds at higher returns than what it costs to obtain the needed capital.
Following a 31% decline over the past year, the stock has a market capitalization of $11.29 billion and a 52-week range of $46.37 to $82.73.
Wall Street sell-side analysts recommend a hold rating for the stock with an average target price of $56.80 per share.
G-III Apparel Group Ltd
The second company to consider is G-III Apparel Group Ltd GIII, a New York-based designer and marketer of apparel for men and women in the United States and internationally.
The stock was trading at around $10.04 per share at close on Aug. 21 for a price-sales ratio of 0.17, which appeals more than the industry median of 0.61.
G-III Apparel Group Ltd has a GuruFocus profitability rating of 7 out of 10, driven by a three-year Ebitda growth rate of 26.9% versus the industry median of 6.25% and by a three-year earnings per share (EPS) without non-recurring items (NRI) growth rate of 38.8% versus the industry median of 3.3%.
The company has received a positive GuruFocus financial strength rating of 5 out of 10, driven by a Piotroski F-Score of 5 out of 9, which indicates that the financial situation of G-III Apparel Group Ltd is stable.
The stock price has fallen by 50.44% over the past year for a market capitalization of $482.45 million and a 52-week range of $2.96 to $34.42.
Wall Street sell-side analysts recommend an overweight rating for this stock and have produced an average target price of $18.78 per share.
McKesson Corp
The third stock investors may want to consider is McKesson Corp MCK, an Irving, Texas-based supplier of medical treatments and equipment in the U.S. and internationally.
The stock was trading at $150.97 per share at close on Aug. 21 for a price-sales ratio of 0.12, which is more appealing than the industry median of 0.44.
McKesson Corp has a positive GuruFocus profitability rating of 7 out of 10, driven by a ROE ratio of 14.82% compared to the industry median of 7.28%.
The company has a GuruFocus financial strength rating of 6 out of 10, driven by a high Piotroski F-Score of 7 out of 9, indicating a healthy financial situation, and a ROIC of 12.07%, which exceeds the WAAC of 3.94%.
The share price has risen 2.64% in the past year for a market capitalization of $24.49 billion, determining a 52-week range of $112.60 to $172.18.
Wall Street sell-side analysts recommend an overweight rating for the stock and have established an average target price of $184.56 per share.
Disclosure: I have no positions in any securities mentioned in this article.
Read more here:
- 3 Fast-Growing Small Caps to Consider
- A Trio of Stocks With Low Forward Price-Earnings Ratios
- A Trio of Stocks Trading Below the Intrinsic Value
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