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Alberto Abaterusso
Alberto Abaterusso
Articles (2482) 

A Trio of Stocks With Low Price-Sales Ratios

These profitable businesses have robust financial conditions

November 18, 2020 | About:

Value investors may want to consider the following stocks, as they have low price-sales ratios, high profitability and robust financial conditions. These three aspects result in a significant likelihood that these stocks could be value opportunities, in my opinion.

Alamo Group Inc

The first stock to consider is Alamo Group Inc (NYSE:ALG), a Seguin, Texas-based manufacturer and seller of farm and heavy construction machineries.

The stock price closed at $138.08 per share on Nov. 17 for a price-sales ratio of 1.36, which appeals more than the S&P 500's price-sales ratio of 2.63.

Alamo has a GuruFocus profitability rating of 8 out of 10, driven by a return on equity (ROE) ratio of 10.15% (versus the industry median of 4.46%) and a return on capital (ROC) ratio of 17.49% (versus the industry median of 8.52%).

The company has received a GuruFocus financial strength rating of 6 out of 10. The rating is driven by an equity-to-asset ratio of 0.52 (compared to the industry median of 0.44) and an Altman Z-Score of 4.08.

Following a 21.2% increase over the past year, the stock has a market capitalization of $1.64 billion and a 52-week range of $70.99 to $140.

Wall Street sell-side analysts recommend a buy rating for this stock and have established an average target price of $139 per share.

ASGN Inc

The second stock to consider is ASGN Inc (NYSE:ASGN), a Glen Allen, Virginia-based provider of professional staffing and IT solutions to several private and public organizations in the U.S. and internationally.

The stock price closed at $84.34 per share on Nov. 17 for a price-sales ratio of 1.13, which is more compelling than the S&P 500's price-sales ratio of 2.63.

ASGN has a GuruFocus profitability rating of 8 out of 10. It is driven by a ROC ratio of 56% (versus the industry median of 11.7%), a three-year revenue growth rate of 17.4% (versus the industry median of 5%) and a three-year earnings per share (EPS) without non-recurring items (NRI) growth rate of 22% (versus the industry median of 6.7%).

The company has received a positive GuruFocus financial strength rating of 6 out of 10. It is driven by a Piotroski F-Score of 6 out of 9 and an Altman Z-Score of 3.7 (greater than 2.99), indicating the existence of solid financial conditions.

Following a 26.5% increase over the past year, the stock now has a market capitalization of $4.46 billion, while the 52-week range is $29.04 to $85.51.

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of $78.71 per share.

Carlisle Companies Inc

The third stock to consider is Carlisle Companies Inc (NYSE:CSL), a Scottsdale, Arizona-based diversified manufacturer of engineered products for companies operating in the building, aerospace and defense, medical, electronics and automotive industries.

The stock price closed at $144.33 per share on Nov. 17 for a price-sales ratio of 1.86, which is more compelling than the S&P 500 price-sales ratio of 2.63.

Carlisle has a GuruFocus profitability rating of 7 out of 10. It is driven by a three-year revenue growth rate of 16.6% (versus the industry median of 4.3%), a three-year Ebitda growth rate of 21.2% (versus the industry median of 5.3%) and a three-year EPS without NRI growth rate of 32.5% (versus the industry median of 3.35%).

The company has a positive GuruFocus financial strength rating of 5 out of 10, driven by an Altman Z-Score of 3.67 and a return on invested capital (ROIC) of 9.1%, which exceeds the weighted average cost of capital (WACC) of 5.75%.

As a result of an 11.4% decline that occurred over the past year, the stock has a market capitalization of $7.7 billion, while the 52-week range is $97.55 to $169.86.

Wall Street recommends an overweight rating for this stock and has established a target price of $149.88 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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