5 Cyclical Companies With Low Price-Earnings Ratios

Toyota makes the list

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Tiziano Frateschi
Jan 07, 2021
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As of Jan. 7, the GuruFocus All-in-One Screener, a Premium feature, found that the following cyclical companies have low price-earnings ratios and are owned by gurus. While some of them are great value investments, others may need to be researched more carefully, according to the discounted cash flow calculator.

Toyota Motor

With a market cap of $214 billion, Toyota Motor Corp. (TM) has a price-earnings ratio of 15.63 and a price-book ratio of 1.07. According to the DCF calculator, the stock has a fair value of $268.17 while trading at $153.29.

The stock has risen 8.89% over the last 12 months and is now 1.93% below the 52-week high and 41.92% above the 52-week low.

The automaker company has a GuruFocus profitability rating of 6 out of 10. The return on equity of 6.94% and return on assets of 2.64% are outperforming 64% of companies in the vehicles and parts industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.37 is below the industry median of 0.54.

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Ken Fisher (Trades, Portfolio) is the company's largest guru shareholder with 0.29% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.07% and NWQ Managers (Trades, Portfolio) with 0.02%.

AutoZone

With a $26.86 billion market cap, AutoZone Inc. (AZO) is trading with a price-earnings ratio of 15.47. According to the DCF calculator, the stock has a fair value of $1,624.56 while trading at $1,180.40.

The share price was stable over the past 12 months and is now 6.90% below the 52-week high and 72.34% above the 52-week low.

The company, which provides aftermarket automotive parts, tools and accessories, has a GuruFocus profitability rating of 9 out of 10. The return on assets of 13.53% is outperforming 95% of companies in the retail, cyclical industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.2 is below the industry median of 0.52.

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The company's largest guru shareholder is

Tweedy Browne (Trades, Portfolio) with 0.41% of outstanding shares, followed by Simons' firm with 0.36% and Steven Cohen (Trades, Portfolio) with 0.17%.

Best Buy

With a market cap of $26.02 billion, Best Buy Co. Inc. (BBY) is trading with a price-earnings ratio of 15.27. According to the DCF calculator, the stock has a fair value of $70.42 while trading at $100.49.

Shares have risen 14.31% over the last 12 months and are now 19.54% below the 52-week high and 108.90% above the 52-week low.

The U.S. consumer electronics retailer has a GuruFocus profitability rank of 7 out of 10. The company's return on equity of 48.3% and return on assets of 9.96% are outperforming 91% of competitors in the retail, cyclical industry. Its financial strength is rated 6 out of 10 with a cash-debt ratio of 1.2 that is above the industry median of 0.52.

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Pioneer Investments (Trades, Portfolio) is the company's largest guru shareholder with 0.70% of outstanding shares, followed by Ken Heebner (Trades, Portfolio) with 0.07% and Joel Greenblatt (Trades, Portfolio) with 0.03%.

D.R. Horton

D.R. Horton Inc. (DHI) has a market cap of $24.55 billion and is trading with a price-earnings ratio of 10.49 and a price-book ratio of 2.10. According to the DCF calculator, the stock has a fair value of $182.77 while trading at $67.34.

Shares have increased 26.08% over the last 12 months and are now trading 17.08% below the 52-week high and 163.97% above the 52-week low.

The U.S. homebuilder has a GuruFocus profitability rating of 8 out of 10. The return on equity of 22.15% and return on assets of 13.81% are outperforming 88% of companies in the homebuilding and construction industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.7 is above the industry median of 0.47.

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The company's largest guru shareholder is

George Soros (Trades, Portfolio) with 0.84% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.28%.

Lennar

Lennar Corp. (LEN) has a market cap of $22.68 billion. Its shares are trading with a price-earnings ratio of 9.45. According to the DCF calculator, the stock has a fair value of $84.11 while trading at $74.27.

Shares have risen 27.94% over the past 12 months and are currently trading 14.43% below the 52-week high and 192.17% above the 52-week low.

The U.S. homebuilder has a GuruFocus profitability rating of 7 out of 10. The return on equity of 14.61% and return on assets of 8.38% are outperforming 69% of companies in the homebuilding and construction industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.45 is below the industry median of 0.47.

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Barrow, Hanley, Mewhinney & Strauss is the company's largest guru shareholder with 1.95% of outstanding shares, followed by Fisher with 0.34% and

Smead Value Fund (Trades, Portfolio) with 0.29%.

Disclosure: I do not own any stocks mentioned.

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