Investors in search of bargain opportunities may be interested in the following businesses as their stocks have a low price-to-median price-sales value when compared to that of the S&P 500, which is a benchmark index for the U.S. market. The price-to-median price-sales value of the S&P 500 is around 1.5.
This approach is based on the idea that the stock valuation will revert to its historical (10-year) average in terms of price-sales ratio. In order to calculate it, investors need to perform a quotient between the current share price (numerator) and the trailing 12-month revenue per share times the 10-year median price-sales ratio (denominator).
Wall Street sell-side analysts have also issued positive recommendation ratings for these securities.
Corning
The first stock investors may be interested in is Corning Inc. (GLW, Financial), a New York-based manufacturer of electronic components for the display technologies, optical communications and life sciences businesses.
Corning's price-to-median price-sales value is 0.97 as of Dec. 31, which ranks higher than 70% of 1,373 companies that operate in the hardware industry.
The company's revenue per share for the trailing 12 months through the most recent quarter was $13.072. Corning's 10-year median price-sales ratio is about 2.84. Thus, the median price-sales value is $37.13.
The stock closed at $36 per share on Thursday for a market capitalization of $27.5 billion and a 52-week range of $17.44 to $38.44.
Currently, Corning pays quarterly dividends to its shareholders, with the last payment, an unchanged 22 cents per common share, made on Dec. 18, for a trailing 12-month dividend yield of 2.44% as of Dec. 31.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 7 out of 10 to its profitability.
Wall Street issued an overweight recommendation rating with an average target price of $37.05 per share for the stock.
TELUS
The second stock investors could be interested in is TELUS Corp. (TU, Financial), a Vancouver, Canada-based provider of telecommunication products and services.
TELUS's price-to-median price-sales value is 1.03 as of Dec. 31, which ranks higher than 46% of 191 companies that operate in the telecommunication services industry.
The company's revenue per share for the trailing 12 months through the most recent quarter was $8.929. The 10-year median price-sales ratio is 2.1469. Thus, its median price-sales value is $19.17.
The stock price traded at around $19.8 per share at close on Thursday for a market capitalization of $25.54 billion and a 52-week range of $13.54 to $20.91.
Currently, TELUS pays quarterly dividends to its shareholders with the next payment of 0.311 Canadian dollars (about 24.4 cents) per common share scheduled for Jan. 4, giving a forward dividend yield of 4.92% as of Dec. 31.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and of 8 out of 10 to its profitability.
Wall Street issued an overweight recommendation rating with an average target price of $20.51 per share for the stock.
Dollar Tree
The third stock investors may be interested in is Dollar Tree Inc. (DLTR, Financial), a Chesapeake, Virginia-based operator of nearly 15,300 discount stores and 24 distribution centers in North America.
Dollar Tree's price-to-median price-sales value is 0.81 as of Dec. 31, which ranks higher than 70% of 159 companies that operate in the defensive retail industry.
The company's revenue per share for the trailing 12 months through the most recent quarter was approximately $105.313. Dollar Tree's 10-year median price-sales ratio is about 1.2631. Therefore, the median price-sales value stands at $133.02.
The stock was trading at around $108.04 per share at close on Thursday for a market capitalization of $25.41 billion and a 52-week range of $60.2 to $114.32.
Currently, Dollar Tree does not pay dividends.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Wall Street issued an overweight recommendation rating with an average target price of $122.23 per share for the stock.
Disclosure: I have no position in any securities mentioned.
Read more here:
- 3 Stocks Trading Below the GuruFocus Value Line
- 3 Magic Formula Stock Picks for the Value Investor
- A Trio of Stocks Trading Below Intrinsic Value
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