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James Li
James Li
Articles (1484)  | Author's Website |

5 European Companies With Historical Low Price-Sales Ratios

Companies with the strength to withstand coronavirus pandemic uncertainty

In light of the coronavirus pandemic continuing its spread around the globe, five European stocks that have high financial strength and profitability and are trading at historical low price-sales ratios are Asseco Poland SA (WAR:ACP), Koninklijke Ahold Delhaize NV (XAMS:AD), Etablissementen Franz Colruyt NV (XBRU:COLR), Ebro Foods SA (XMAD:EBRO) and Toma AS (XPRA:TOMA) according to the All-in-One Screener, a Premium feature of GuruFocus.

Dow falls from record as investors monitor coronavirus news around the globe

On Friday, the Dow Jones Industrial Average closed at 30,996.98, down 179.03 points from Thursday's close of 31,176.01 and 191.40 points from Wednesday's record close of 31,188.38.

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Stocks were pressured as investors monitored news regarding additional coronavirus stimulus packages in the U.S. coupled with travel restrictions among European Union countries to combat the spread of the virus. According to CNBC, President Joe Biden's $1.9 trillion stimulus package faces disdain from Republican senators regarding the size of the proposed payments. Sevens Report Founder Tom Essaye added that the "political reality of Washington" could jeopardize Democrats' "ambitious stimulus goals" from becoming law.

CNBC also reported that while European countries agreed to keep their borders open, country leaders discouraged nonessential travel within the continent. European Council President Charles Michel said on Thursday evening that the borders must stay open to "keep the internal market functioning" yet citizens who travel from areas with high virus spread must "have a negative [PCR] test and undergo quarantine" upon arrival to a different country.

As such, investors may find opportunities in European companies with the strength to withstand uncertainty regarding the coronavirus pandemic and are trading at historical low price-sales ratios. The Historical Low Price-Sales model portfolio has returned an annualized 15.61% per year over the past five years and an annualized 12.59% per year over the past 10 years, outperforming the Standard & Poor's 500 Index benchmark returns of an annualized 15.55% per year over the past five years and an annualized 11.61% over the past 10 years.

The All-in-One Screener listed five European companies with a financial strength rank of at least 6, a profitability rank of at least 7, a business predictability rank of at least three stars and a price-sales ratio no higher than 20% above the historical low.

Asseco Poland

Shares of Asseco Poland (WAR:ACP) traded around 66.80 zloty ($17.91) on Friday. GuruFocus ranks the company's valuation 9 out of 10 on the back of a price-sales ratio that is close to a 10-year low of 0.4 and outperforms over 91% of global competitors.

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The Polish technology company develops sector-specific software for a wide range of market sectors. GuruFocus ranks the company's profitability 7 out of 10, driven by a three-star business predictability rank and an operating margin that outperforms 68.93% of global competitors.

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Koninklijke Ahold Delhaize

Shares of Koninklijke Ahold Delhaize (XAMS:AD) traded around 23.72 euros ($28.86) on Friday. GuruFocus ranks the company's valuation 8 out of 10 on the back of price-sales and price-to-operating cash flow ratios trending below 20% of 10-year lows despite outperforming just over 60% of global competitors.

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GuruFocus ranks the Netherlands-based grocery retailer's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased approximately 2.8% per year on average over the past five years.

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Etablissementen Franz Colruyt

Shares of Etablissementen Franz Colruyt (XBRU:COLR) traded around 50.40 euros on Friday. GuruFocus ranks the company's valuation 6 out of 10: price-book and price-sales ratios are underperforming over 60% of global competitors despite trending close to 10-year lows.

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GuruFocus ranks the Belgian food retailer's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 7 and a net profit margin that is near a 10-year high of 4.90% and outperforms over 86% of global competitors.

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Ebro Foods

Shares of Ebro Foods (XMAD:EBRO) traded around 18 euros on Friday. GuruFocus ranks the company's valuation 9 out of 10 on the back of price-book, price-sales, price-to-operating cash flow, and price-to-free cash flow ratios close to 10-year lows.

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The Spanish consumer packaged food company produces rice, pasta and sauce products and markets them across the globe. GuruFocus ranks the company's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and a high Piotroski F-score of 7.

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Toma

Shares of Toma (XPRA:TOMA) traded around 1,250 Czech koruna ($58.24). GuruFocus ranks the company's valuation 8 out of 10 on the back of price-earnings and price-sales ratios close to 10-year lows, with price-earnings ratios outperforming over 86% of global competitors.

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GuruFocus ranks the Czech-based industrial conglomerate's profitability 7 out of 10: Operating margins are close to a 10-year high and outperform over 78% of global competitors despite three-year revenue and earnings growth rates outperforming just around half of industrial conglomerates.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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