Here are seven stocks gurus are buying that are trading with low price-earnings (P/E) ratios. Some of them are great investments; others need a double check, according to the DCF calculator.
The Hanover Insurance Group Inc. (THG) with a market cap of $3.53 billion is trading with a P/E ratio of 14.66 and a price-sales (P/S) ratio of 0.76. According to the DCF calculator the stock has a fair value of $73.36 while trading at about $83.09 overpriced by 13%. The price has risen 8% during the last 12 months and is now 9.67% below its 52-week high and 12.19% above its 52-week low.
It is a holding company. It is engaged in providing property and casualty insurance products and services to businesses, individuals and families through a group of independent agents and brokers.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Jim Simons (Trades, Portfolio) with 1.23% followed by Pioneer Investments (Trades, Portfolio) with 0.66%.
Cosan Ltd. (CZZ) with a market cap of $2.27 billion is trading with a P/E ratio of 12.40 and a P/S ratio of 0.60. According to the DCF calculator the stock has a fair value of $7.42 while trading at about $8.56 overpriced by 15%. The price has risen by 198% during the last 12 months and is now 9.89% below its 52-week high and 235.69% above its 52-week low.
The company is engaged in piped natural gas distribution, logistics services including transportation, port loading and storage of sugar, purchase, sale and leasing of agricultural land, production and distribution of lubricants and other investments.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Simons with 1.75% and Steven Cohen (Trades, Portfolio) with 0.55%.
Unum Group (UNM) with a market cap of $10.41 billion is trading with a P/E ratio of 11.75 and a P/S ratio of 3.10. According to the DCF calculator the stock has a fair value of $44.4 while trading at almost the same price. The price has risen by 64% during the last 12 months and is now 1.41% below its 52-week high and 86.87% above its 52-week low.
It is a general business corporation. The company provides insurance and noninsurance services through its subsidiaries. It also provides a complementary portfolio of other insurance products.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are HOTCHKIS & WILEY with 3.66% and Donald Smith (Trades, Portfolio) with 2.93%.
Mobile TeleSystems PJSC ADRÂ (MBT) with a market cap of $10.67 billion is trading with a P/E ratio of 14.14 and a P/S ratio of 1.39. According to the DCF calculator the stock has a fair value of $8.12 while trading at about $10.33, overpriced by 27%. The price has risen by 72% during the last 12 months and is now 2.64% below its 52-week high and 73.61% above its 52-week low.
The company provides telecommunications services including voice and data transmission, Internet access, pay TV, various value added services through wireless and fixed lines and sells equipment and accessories.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Jeremy Grantham (Trades, Portfolio) with 1.9% and Simons with 0.88%.
Lithia Motors Inc. Class AÂ (LAD) with a market cap of $2.48 billion is trading with a P/E ratio of 13.12 and a P/S ratio of 0.31. According to the DCF calculator the stock has a fair value of $80.37 while trading at about $98.54, overpriced by 23%. The price has risen by 26% during the last 12 months and is now 6.44% below its 52-week high and 43.44% above its 52-week low.
The company is an operator of automotive franchises and a retailer of new and used vehicles and related services. It sells new and used cars and replacement parts; provides vehicle maintenance, warranty, paint and repair services; arranges related financing; and sells service contracts, vehicle protection products and credit insurance.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Joel Greenblatt (Trades, Portfolio) with 0.18% and Cohen with 0.02%.
Caesars Acquisition Co. Class AÂ (CACQ) with a market cap of $2.11 billion is trading with a P/E ratio of 3.85 and a price-book (P/B) ratio of 1.30. According to the DCF calculator the stock has a fair value of $42.49 while trading at about $15.25 with a margin of safety of 64%. The price has risen by 171% during the last 12 months and is now 0.65% below its 52-week high and 240.40% above its 52-week low.
The company owns, operates and manages casino entertainment facilities and operates its resorts under the Caesars, Harrah's and Horseshoe brand names. It operates in two segments: Interactive Entertainment and Casino Properties & Development.
Currently two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are John Paulson (Trades, Portfolio) with 9.49% and George Soros (Trades, Portfolio) with 4.71%.
Entergy Corp. (ETR) with a market cap of $12.66 billion is trading with a P/E ratio of 9.86 and a P/S ratio of 1.19. According to the DCF calculator the stock has a fair value of $76.52 while trading at about $70.68; the stock is undervalued with a margin of safety of 8%. The price has risen by 5% and during the last 12 months and is now 13.90% below its 52-week high and 5.95% above its 52-week low.
It is an energy company. It is engaged in electric power production and retail electric distribution operations.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares of the company are Barrow, Hanley, Mewhinney & Strauss with 2.22% and Simons with 1.8%.
Disclosure: I do not own shares of any stocks mentioned in this article.
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