When looking for bargains, investors may want to consider the following companies since thay have low price-to-median price-sales values when compared to the average of the S&P 500 (which stands at around 1.66 as of the writing of this article).
This approach is based on the idea that the stock's valuation will revert to its historical 10-year average in terms of the price-sales ratio. It requires investors to divide the current share price by the trailing 12-month revenue per share multiplied by the 10-year median price-sales ratio.
Wall Street sell-side analysts have also issued optimistic recommendation ratings for these stocks, meaning they expect higher share prices in the months ahead.
Telefonica
The first stock investors may want to consider is Telefonica SA (TEF, Financial), a Spanish telecommunication services provider that operates in Europe and South America.
Currently, Telefonica’s price-to-median price-sales value is about 0.65, which ranks higher than 87% of the 201 companies that operate in the telecommunication services industry.
The company's revenue per share for the trailing 12 months ended in September 2021 was $8.95. Telefonica has a 10-year median price-sales ratio of 0.77. Thus, the median price-sales value was $6.96 in early trading on Jan. 19.
The stock price was $4.53 per share in early trading on Jan. 19 for a market capitalization of $25.80 billion and a 52-week range of $4.12 to $5.17.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Wall Street issued a median recommendation rating of hold with an average target price of $5.19 per share for the stock.
Delta Air Lines
The second stock investors may want to consider is Delta Air Lines Inc. (DAL, Financial), an Atlanta-based airline.
Currently, Delta's price-to-median price-sales value is about 0.96, which ranks higher than 66% of the 507 companies that operate in the transportation industry.
The revenue per share for the trailing 12 months ended Dec. 31, 2021 was $46.773. Delta has a 10-year median price-sales ratio of 0.86. Thus, its median price-sales value was $40.53 in early trading on Jan. 19.
The stock price was $38.94 per share in early trading on Jan. 19 for a market capitalization of $24.94 billion and a 52-week range of $33.40 to $52.28.
GuruFocus assigned a score of 3 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Wall Street issued a median recommendation rating of overweight for the stock with an average target price of $52.20 per share.
Sirius XM Holdings
The third stock investors may want to consider is Sirius XM Holdings Inc. (SIRI, Financial), a New York-based provider of satellite radio services in the U.S.
Currently, Sirius XM's price-to-median price-sales value is about 0.60, which ranks better than 83% of the 467 companies that operate in the media-diversified industry.
The revenue per share for the trailing 12 months ended in September 2021 was $2.05. Sirius XM has a 10-year median price-sales ratio of 4.93. Thus, its median price-sales value was $10.10 in early trading on Jan. 19.
The stock price was $6.12 per share in early trading on Jan. 19 for a market capitalization of $24.26 billion and a 52-week range of $5.75 to $8.14.
GuruFocus assigned a score of 3 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Wall Street gave the stock a median recommendation rating of overweight with an average target price of about $7.34 per share.
POSCO
The fourth stock investors may want to consider is POSCO (PKX, Financial), a South Korean producer of rolled steel products and plates.
Currently, POSCO's price-to-median price-sales value is about 0.83, which ranks better than 79% of the 353 companies that operate in the steel industry.
The revenue per share for the trailing 12 months ended in September 2021 was $202.39. POSCO has a 10-year median price-sales ratio of 0.36. Thus, its median price-sales value was $72.94 in early trading on Jan. 19.
The stock price was $60.27 per share in early trading on Jan. 19 for a market capitalization of $18.23 billion and a 52-week range of $54.40 to $92.19.
GuruFocus assigned a score of 6 out of 10 to both the company's financial strength and its profitability.
Wall Street issued a recommendation rating of overweight with an average target price of about $88.98 per share for the stock.
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