The following stocks have low price-earnings ratios and have been bought by gurus. While some of them are great investments, others need to be checked again, according to the discounted cash flow calculator.
With a market cap of $42.44 billion, Altaba Inc. (AABA) is trading with a price-earnings ratio of 2.98 and a price-book ratio of 1.20. According to the DCF calculator, the stock has a fair value of $267.22 while trading at $72. The share price was stable over the last 12 months and is trading 9.29% below its 52-week high and 36.60% above its 52-week low.
GuruFocus gives the closed-end management company a profitability and growth rating of 4 out of 10. The return on equity of 40.86% and return on assets of 29.33% are outperforming 97% of companies in the Global Asset Management industry. Its financial strength is rated 3 out of 10. The debt-equity ratio of 0.09 is below the industry median of 0.33.
The company’s largest guru shareholder is Paul Singer (Trades, Portfolio)’s Elliott Management with 3.68% of outstanding shares, followed by First Pacific Advisors (Trades, Portfolio) with 1.21%, PRIMECAP Management (Trades, Portfolio) with 0.97% and Steven Romick (Trades, Portfolio)’s FPA Crescent Fund with 0.79%.
With a $1.31 billion market cap, Asbury Automotive Group Inc. (ABG) is trading with a price-earnings ratio of 8.07, a price-sales ratio of 0.20 and a forward price-earnings ratio of 8.55. According to the DCF calculator, the stock has a fair value of $88.61 while trading at $67. The share price was stable over the last 12 months and is trading 13.84% below its 52-week high and 14.32% above its 52-week low.
GuruFocus gives the automotive retailer a profitability and growth rating of 7 out of 10. The return on equity of 37.78% and return on assets of 6.71% are outperforming 73% of companies in the Global Auto and Truck Dealerships industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.01 is below the industry median of 0.61.
Abrams Capital Management’s David Abrams (Trades, Portfolio) is the company’s largest guru shareholder with 9.71% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.11%, HOTCHKIS & WILEY with 0.24% and Jeremy Grantham (Trades, Portfolio)’s GMO with 0.14%.
With a market cap of $1.1 billion, Arbor Realty Trust Inc. (ABR) is trading with a price-earnings ratio of 8.59 and a price-sales ratio of 3.62. According to the DCF calculator, the stock has a fair value of $16.05 while trading at $12.7. The share price fell 32% over the last 12 months and is trading 2.87% below its 52-week high and 51.89% above its 52-week low.
GuruFocus rated the profitability and growth rating of the real estate specialty finance firm, 4 out of 10. While the return on equity of 13.98% is outperforming the sector, the return on assets of 2.80% is underperforming 66% of companies in the Global REIT - Diversified industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 0.07 is slightly below the industry median of 0.06.
The company’s largest guru shareholder is the Simons’ firm 0.18% of outstanding shares, followed by Paul Tudor Jones (Trades, Portfolio) with 0.13%, Steven Cohen (Trades, Portfolio)’s Point72 Asset Management with 0.11% and Leon Cooperman (Trades, Portfolio)’s OMEGA Advisors with 0.09%.
Bed Bath & Beyond Inc. (BBBY) has a market cap of $2.14 billion. It is trading with a price-earnings ratio of 6.90, a price-sales ratio of 0.17 and a forward price-earnings ratio of 8.58. According to the DCF calculator, the stock has a fair value of $31.27 while trading at $15. The share price has fallen 29% over the last 12 months and is trading 33.25% below its 52-week high and 48.57% above its 52-week low.
GuruFocus gives the retail stores operator a profitability and growth rating of 8 out of 10. The return on equity of 10.82% and return on assets of 4.30% are outperforming 67% of companies in the Global Specialty Retail industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.67 is below the industry median of 0.99.
With 5.73% of outstanding shares, HOTCHKIS & WILEY is the company’s largest guru shareholder, followed by Ray Dalio (Trades, Portfolio)’s Bridgewater Associates with 2.74% and the Simons’ firm with 0.57%.
BBX Capital Corp. (BBX) has a market cap of $600 million. The class A shares are trading with a price-earnings ratio of 9.31 and a price-sales ratio of 0.72. According to the DCF calculator, the stock has a fair value of $7.17 while trading at about $6.14. The share price has fallen 31% over a 12-month period and is currently 38.64% below its 52-week high and 19.31% above its 52-week low.
The company has a GuruFocus profitability and growth rating of 4 out of 10. The return on equity of 12.26% and return on assets of 4.20% are outperforming 61% of companies in the Global Real Estate Services industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.48 is below the industry median of 0.31.
The company’s largest guru shareholder is the Simons’ firm with 1.11% of outstanding shares, followed by Jones with 0.09% and Caxton Associates (Trades, Portfolio) with 0.01%.
Birks Group Inc. (BGI) has a market cap of $18 million; the stock is trading with a price-earnings ratio of 2.85 and a price-sales ratio of 0.17. The share price has fallen 19% over the last 12 months and is trading 63.90% below its 52-week high and 31.58% above its 52-week low.
GuruFocus gives the manufacturer of prestige jewelry a profitability and growth rating of 3 out of 10. The return on equity of 34.47% and the return on assets of 4.63% are outperforming 75% of companies in the Global Luxury Goods industry. Its financial strength is rated 3 out of 10. The cash-debt of 0.02 is below the industry median of 0.99.
Disclosure: I do not own any stocks mentioned.
