Buying stocks based on historical low price-to-sales (P/S) ratios has been shown to be an effective investment strategy. At GuruFocus our “Top 25 Historical Low P/S Ratio Companies” portfolio has outperformed the S&P 500 by 24.38 percent since its inception in 2010. Our portfolio is rebalanced once a year and can be viewed at GuruFocus.com. Below is the latest list of stocks that are trading near historical low P/S ratios and are widely held by the investing gurus we follow:
Qualcomm Inc (QCOM) is trading at a low P/S ratio of 5.30, near its 10-year low of 4.48. The company designs, develops, manufactures, and market digital communications products and services based CDMA, OFDMA, and other technologies. In the United States, CDMA technology is used in phones serviced by Verizon, Sprint, and U.S. Cellular. The stock is held by 16 gurus we follow with PRIMECAP Management having the largest holding of 19 million shares, representing 1.11 percent of the shares outstanding.
Market Cap: 133.78 billion, P/E: 19.80
Business Predictability: 5/5, Financial Strength: 8/10, Profitability & Growth: 9/10
ConAgra Foods Inc (CAG) is trading at a low P/S ratio of 0.70, near its 10-year low of 0.59. It operates as a food company primarily in North America through three segments: Consumer Foods, Commercial Foods, and Private Brands. ConAgra has many well known brands including ACT II, Banquet, Chef Boyardee, Healthy Choice, Slim Jim, and Swiss Miss. The stock is held by 13 gurus we follow with Joel Greenblatt of Gotham Asset Management having the largest holding of 867,537 shares, representing 0.21 percent of the shares outstanding.
Market Cap: 13.02 billion, P/E: 43.80
Business Predictability: 3/5, Financial Strength: 5/10, Profitability & Growth: 6/10
Outerwall Inc (OUTR) is trading at a low P/S ratio of 0.60, near its 10-year low of 0.59. The company provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. Redbox is the most well known of the kiosks. With competition like Netflix and Amazon Prime, how long will it take for Redbox to go the route of Blockbuster, and can Outerwall prepare for it? The stock is held by 10 gurus we follow with Ken Fisher of Fisher Asset Management having the largest holding of 1.24 million shares, representing 4.42 percent of the shares outstanding.
Market Cap: 1.1 billion, P/E: 8.50
Business Predictability: 3/5, Financial Strength: 5/10, Profitability & Growth: 8/10
Owen & Minor (OMI) is trading at a low P/S ratio of 0.20, near its 10-year low of 0.18. The company offers supply chain assistance to the providers of healthcare services; and the manufacturers of healthcare products, supplies, and devices. The stock is held by 10 gurus we follow with the Vanguard Health Care Fund having the largest holding of 3 million shares, representing 4.74 percent of the shares outstanding.
Market Cap: 2.2 billion, P/E: 20.30
Business Predictability: 3/5, Financial Strength: 5/10, Profitability & Growth: 6/10
NeuStar Inc (NSR) is trading at a low P/S ratio of 1.90, near its 10-year low of 1.73. The company provides technology and directory service to customers pursuant to various private commercial and government contracts worldwide. It has been working on diversifying its revenue base by expanding into marketing, IT/security, and data analytics. The stock will remain stagnant until the FCC decides which company to award the local number portability administrator (LNPA) contract to. Number portability administration accounts for half of the NeuStar’s revenue, and the latest news has a subsidiary of Ericsson in the lead for the contract. The stock is held by 7 gurus we follow with PRIMECAP Management having the largest holding of 3.78 million shares, representing 5.87 percent of the shares.
Market Cap: 1.64 billion, P/E: 11.10
Business Predictability: 4.5/5, Financial Strength: 6/10, Profitability & Growth: 9/10
People’s United Financial Inc (PBCT) is trading at a low P/S ratio of 3.70, near its 10-year low of 3.16. It operates as bank holding company for People’s United Bank that provides commercial banking, retail and business banking, and wealth management services to individual, corporate, and municipal customers. The bank has been providing services since 1842. The stock is held by 7 gurus we follow with James Barrow of Barrow, Hanley, Mewhinney & Strauss having the largest holding of 13 million shares, representing 4.06 percent of the shares outstanding.
Market Cap: 4.62 billion, P/E: 19.30
Business Predictability: 3/5, Financial Strength: 5/10, Profitability & Growth: 8/10
For the complete list of GuruFocus list of companies that are traded at historical low P/S ratios, go to: GuruFocus Value Strategies of Historical Low P/S Ratios.
