Gurus are buying stocks that are trading with low price-earnings (P/E) ratios. Some are greatly undervalued, according to the DCF calculator.
Credit Acceptance Corp. (CACC), with a market cap of $3.72 billion, is trading with a P/E ratio of 12.08 and a price-sales (P/S) ratio of 4.20. According to the DCF calculator the stock has a fair value of $430.44 while trading at about $182; it is largely undervalued with a margin of safety of 58%. The price has dropped by 16% during the last 12 months and is now 29.28% below its 52-week high and 14.70% above its 52-week low.
Credit Acceptance is a financing company that offers automobile dealers financing programs that enable them to sell vehicles to consumers regardless of their credit history.
Two hedge funds hold the company. The gurus with the largest holdings are Seth Klarman (Trades, Portfolio) with 0.49% of outstanding shares and Mario Gabelli (Trades, Portfolio) with 0.02%.
Taro Pharmaceutical Industries Ltd. (TARO), with a market cap of $4.54 billion, is trading with a P/E ratio of 8.1 and a P/S ratio of 4.41. According to the DCF calculator the stock has a fair value of $136 while trading at about $106.06; it is undervalued with a margin of safety of 23%. The price has dropped by 28% during the last 12 months and is now 32.87% below its 52-week high and 4.99% above its 52-week low.
Taro Pharmaceutical Industries is a multinational, science-based pharmaceutical company. It develops, manufactures and markets prescription and over-the-counter pharmaceutical products in the U.S., Canada and Israel.
Two hedge funds hold the company. The gurus with the largest holdings are Jim Simons (Trades, Portfolio) with 1.45% of outstanding shares and HOTCHKIS & WILEY with 0.35%.
WR Berkley Corp. (WRB), with a market cap of $6.94 billion, is trading with a P/E ratio of 13.1 and a P/S ratio of 0.99. According to the DCF calculator the stock has a fair value of $46.55 while trading at about $56. It is overpriced by 21%. The price is now the same as it was 12 months ago –Â 5.91% below its 52-week high and 18.91% above its 52-week low.
WR Berkley is an insurance holding company with operations in the U.S. It operates in the property casualty insurance business and has three segments: Insurance-Domestic, Insurance-International and Reinsurance- Global.
Two hedge funds hold the company. The gurus with the largest holdings are First Eagle Investment (Trades, Portfolio) with 5.41% of outstanding shares and Gabelli with 0.37%.
Fibria Celulose SA ADRÂ (FBR), with a market cap of $4.3 billion, is trading with a P/E ratio of 6.78 and a P/S ratio of 1.31. According to the DCF calculator the stock has a fair value of $10.82 while trading at about $7.70; it is undervalued with a margin of safety of 28%. The price has dropped by 46% during the last 12 months and is now 47.99% below its 52-week high and 34.20% above its 52-week low.
Fibria Celulose SA is a producer of eucalyptus pulp. Its pulp-producing facilities include Aracruz, Três Lagoas and Jacareà Â.
Two hedge funds hold the company. The gurus with the largest holdings are Simons with 0.83% of outstanding shares and Steven Cohen (Trades, Portfolio) with 0.38%.
LaSalle Hotel Properties (LHO), with a market cap of $2.83 billion, is trading with a P/E ratio of 11.37 and a P/S ratio of 2.27. According to the DCF calculator the stock has a fair value of $12.41 while trading at about $24; it is overpriced by 91%. The price has dropped by 20% during the last 12 months and is now 21.47% below its 52-week high and 24.88% above its 52-week low.
La Salle Hotel Properties is a real estate investment trust. The company's business includes buying, owing, redeveloping and leasing mainly upscale and luxury full-service hotels located in convention, resort and urban business markets.
Two hedge funds hold the company. The gurus with the largest holdings are Manning & Napier Advisors Inc. with 0.21% and Paul Tudor Jones (Trades, Portfolio) with 0.04% of outstanding shares.
Murphy USA Inc. (MUSA), with a market cap of $2.69 billion, is trading with a P/E ratio of 11.11 and a P/S ratio of 0.24. According to the DCF calculator the stock has a fair value of $57.25 while trading at about $68. It is overpriced by 20%. The price has risen by 12% during the last 12 months and is now 14.55% below its 52-week high and 33.01% above its 52-week low.
Murphy USA is engaged in marketing of retail motor fuel products and convenience merchandise through a large chain of 1,263 retail stations.
Two hedge funds hold the company. The gurus with the largest holdings are Gabelli with 1.18% and Simons with 0.8% of outstanding shares.
Disclosure: I do not own any shares of any stocks mentioned in this article.
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