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Alberto Abaterusso
Alberto Abaterusso
Articles (2604) 

A Trio of Low Price-Sales Ratio Stocks

These high return businesses have robust financial conditions

March 03, 2021 | About:

Value investors may want to consider the stocks listed below, as they have low price-sales ratios, good profitability and robust financial conditions.

Fabrinet

The first stock to consider is Fabrinet (NYSE:FN), a George Town, Cayman Islands-based provider of optical packaging and electro-mechanical manufacturing services in North America and internationally.

The stock price was trading at $89.38 per share at close on March 2 for a price-sales ratio of 1.97, which appeals more than the S&P 500's price-sales ratio of 2.84.

Fabrinet has a GuruFocus profitability rating of 7 out of 10, driven by a return on assets (ROA) ratio of 8.97% versus the industry median of 2.33%.

The company has received a GuruFocus financial strength rating of 8 out of 10. The rating is driven by a high Altman Z-Score of 7.28 and an interest coverage ratio of 126.92 (versus the industry median of 15.55).

Following a 50.5% increase over the past year, the stock has a market capitalization of $3.3 billion and a 52-week range of $44 to $91.95.

As of March, Wall Street sell-side analysts recommend two strong buys, three buys and one hold rating for the stock with an average target price of $92.25 per share.

Brady Corp

The second stock to consider is Brady Corp (NYSE:BRC), a Milwaukee-based manufacturer and provider of identification solutions and workplace safety products for the identification and safeguard of premises, products and people in the U.S. and internationally.

The stock price was trading at $53.57 per share at close on March 2 for a price-sales ratio of 2.65, which is more compelling than the S&P 500's price-sales ratio of 2.84.

Brady Corp has a GuruFocus profitability rating of 6 out of 10, which is driven by an operating margin of 14.08% (versus the industry median of 4.13%).

The company has received a GuruFocus financial strength rating of 8 out of 10, which is driven by an Altman Z-Score of 8.28 and an interest coverage ratio of 153.14 (versus the industry median of 11.89).

Following a 6.5% increase over the past year, the stock now has a market capitalization of $2.79 billion and a 52-week range of $33 to $54.70.

As of March, Wall Street sell-side analysts recommend two strong buys, three holds and one underperform rating for this stock and have established an average target price of $55.75 per share.

Cavco Industries Inc

The third stock to consider is Cavco Industries Inc (NASDAQ:CVCO), a Phoenix, Arizona-based designer, producer and retailer of manufactured residential buildings in the U.S.

The stock price was trading at $216.50 per share at close on March 2 for a price-sales ratio of 1.9, which appeals more than the S&P 500's price-sales ratio of 2.84.

Cavco Industries Inc has a GuruFocus profitability rating of 7 out of 10. It is driven by a return on capital (ROC) ratio of 65.49% versus the industry median of 12.96% and a return on assets (ROA) ratio of 7.51% versus the industry median of 3.5%.

The company has a positive GuruFocus financial strength rating of 8 out of 10, driven by an Altman Z-Score of 7.51, an interest coverage ratio of 97.44 (versus the industry median of 15.15) and a cash-debt ratio of 11.15 (versus the industry median of 0.55).

Tuesday's closing price of $216.50 per share is slightly lower over the past year. The stock has a market capitalization of $1.99 billion, while the 52-week range is $99.58 to $231.35.

As of March, on Wall Street, one sell-side analyst recommends a strong buy rating and another sell-side analyst recommends a buy rating for the stock. The average target price is $234 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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