When looking for bargains, investors may want to consider the following companies because their price-to-median-price-sales values are low compared to the average of the S&P 500 (which stands at around 1.56 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.
Teck Resources Ltd
The first stock investors may want to consider is Teck Resources Ltd (TECK, Financial), a Vancouver, Canada-based global industrial metals and mining company.
Currently, Teck Resources Ltd.’s price-to-median-price-sales value is about 1.43, which ranks lower than 67% of the 366 companies that operate in the metals and mining industry.
The company's revenue per share for the trailing 12 months ended in September 2021 was $17.205. Teck Resources has a 10-year median price-sales ratio of 1.4496. Thus, the median price-sales value was $24.94 in early trading on Feb. 23.
The stock price was $35.53 per share in early trading on Feb. 23 for a market capitalization of $18.99 billion and a 52-week range of $17.30 to $37.23.
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 a median recommendation rating of overweight with an average target price of $38.64 per share for the stock.
CGI Inc.
The second stock investors may want to consider is CGI Inc. (GIB, Financial), a Montreal, Canada-based provider of information technology and business process services in North America and internationally.
Currently, CGI Inc.'s price-to-median-price-sales value is about 1.15, which ranks higher than 51% of the 926 companies that operate in the software industry.
The revenue per share for the trailing 12 months ended Dec. 31, 2021 was $38.898. CGI has a 10-year median price-sales ratio of 1.8289. Thus, its median price-sales value was $71.14 in early trading on Feb. 23.
The stock price was $81.56 per share in early trading on Feb. 23 for a market capitalization of $19.86 billion and a 52-week range of $74.58 to $93.93.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and 9 out of 10 to its profitability.
Wall Street issued a median recommendation rating of overweight for the stock with an average target price of $99.90 per share.
International Paper Co
The third stock investors may want to consider is International Paper Co (IP, Financial), a Memphis, Tennessee-based paper and packaging company.
Currently, International Paper Co's price-to-median-price-sales value is about 1.01, which ranks better than 60% of the 188 companies that operate in the packaging and containers industry.
The revenue per share for the trailing 12 months ended in December 2021 was $49.233. International Paper Co has a 10-year median price-sales ratio of 0.8626. Thus, its median price-sales value was $42.47 in early trading on Feb. 23.
The stock price was $46.91 per share in early trading on Feb. 23 for a market capitalization of $17.69 billion and a 52-week range of $43.87 to $61.80.
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 gave the stock a median recommendation rating of hold with an average target price of about $51.85 per share.
Pembina Pipeline Corp
The fourth stock investors may want to consider is Pembina Pipeline Corp. (PBA, Financial), a Canadian oil and gas midstream operator in North America.
Currently, Pembina Pipeline Corp's price-to-median-price-sales value is about 0.97, which ranks lower than 53% of the 519 companies that operate in the oil and gas industry.
The revenue per share for the trailing 12 months ended in September 2021 was $11.323. Pembina Pipeline Corp has a 10-year median price-sales ratio of 2.9648. Thus, its median price-sales value was $33.57 in early trading on Feb. 23.
The stock price was $32.77 per share in early trading on Feb. 23 for a market capitalization of $18.02 billion and a 52-week range of $25.38 to $34.73.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Wall Street issued a median recommendation rating of overweight with an average target price of about $35.01 per share for the stock.
