Stocks with P/E under 10 That 10 or More Gurus Bought

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Mar 21, 2012
GuruFocus just released its All-in-One Screener. As the name implies, it’s a place for users to create unique screens with all of the investing measurements, components and criteria in one place. Simply navigate through the six category tabs in the menu at the top to see the various features. Every time you click a new scroll-down menu, the screener automatically filters the stocks that match your requirements and shows them in the box at the bottom.


As a demonstration, if the Max P/E under the Valuation tab is placed on 10, and the Recent Guru Buying/Adding is set to 10+ Gurus Over Past 3 Months under the Gurus tab, the stocks with P/Es under 10 that 10 or more gurus have purchased in the last 3 months appear. These stocks are: General Motors (GM, Financial), BP Plc (BP, Financial) and Citigroup Inc. (C, Financial).


General Motors (GM)


General Motors, the world’s largest automaker, emerged from Chapter 11 bankruptcy in 2009 and was listed on the New York Stock Exchange on Nov. 18, 2010. Its IPO shares sold for $33 and raised $23 billion. The U.S. Treasury department still owns about 33% of the company.


GM’s P/E is 5.55, which is actually high compared to its short post-bankruptcy history. Its share price has increased 25.6% year to date, and earnings per share in the trailing 12 months are $4.94.





That 10-year-record earnings per share was an increase from $2.89 per share in 2010, and was produced in their first full year as a public company. The downside is that the company’s European division lost $747 million in 2011, and its South American division lost $122 million. Overall, sales increased 12.2% year over year.


BP Plc (BP)


BP Plc (BP) is the third-largest energy company and fourth-largest company in the world by revenue, with operations in over 80 countries. It was also involved in the April 2010 Deepwater Horizon well explosion in the Gulf of Mexico, which cut its stock price more than in half.


BP’s PE is 5.7, low on a historical basis. Year to date, the company’s stock price has increased almost 8% to $46 per share, and diluted earnings per share for the trailing 12 months are $8.06. Oil prices averaged $111.26 in 2011, a 40% increase from 2010’s average $79.50 per barrel, marking the largest annual average ever as well as the largest one-year increase ever. Demand was also lower, rising approximately 0.8% for the year, compared to 3.1% in 2010.


Other factors that affected the company’s 2011 results compared with 2010, were higher realizations, higher earnings from equity accounted entities, a higher refining margin environment and a stronger supply and trading contribution, partly offset by lower production volumes, rig standby costs in the Gulf of Mexico, higher costs related to turnarounds,, higher exploration write-offs, and negative impacts of increased relative, sweet crude prices in Europe and Australia, primarily caused by the loss of


Libya production and the weather-related power outages in the US.





In 2010, the year of the oil spill, the company reported a net loss of $1.19 per share, and the year prior reported $5.25 per share. Its stock price has not been following its earnings recently, as that year, 2009, its stock traded for as high as the upper $50s.


Citigroup (C)


Citigroup is a global financial services company with approximately 200 million customer accounts that does business in more than 160 countries and jurisdictions in North America, EMEA, Latin America and Asia.


Citigroup has a P/E of 9.9, which has been increasing since mid-2012. Its stock has increased 44% year to date and reached $37.80 per share. Earnings per share increased to $3.63 in 2011 from $3.50 per share in 2010, after two years of losses.





In 2011, the company grew loans by 15%, deposits increased from $845 million in 2010 to $865.9 million, and its Tier 1 capital ratio increased from 10.8% to 11.8%.


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