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Tiziano Frateschi
Tiziano Frateschi
Articles (2006)  | Author's Website |

6 Gurus' Stocks With Low Price-Earnings Ratios

Goldman Sachs makes the list

March 18, 2019 | About:

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 $1.02 billion, class-A shares of National Western Life Group Inc. (NWLI) are trading with a price-earnings ratio of 8.44 and a price-book ratio of 0.54. According to the DCF calculator, the stock has a fair value of $540.56 while trading at $279.23. The share price has fallen 12% the last 12 months and is trading 16.65% below its 52-week high and 7.13% above its 52-week low.

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GuruFocus gives the stock life insurance company a profitability and growth rating of 1 out of 10. While the return on equity of 6.28% is underperforming the sector, the return on assets of 0.97% is outperforming 56% of companies in the Global Insurance - Life industry. Its financial strength is rated 8 out of 10 with no debt. The equity-asset ratio of 0.16 is above the industry median of 0.08.

The company’s largest guru shareholder is Tweedy Browne (Trades, Portfolio) with 2.09% of outstanding shares, followed by Hotchkis & Wiley with 0.74%, Jim Simons' (Trades, Portfolio) Renaissance Technologies with 0.47% and Royce & Associates’ Chuck Royce (Trades, Portfolio) with 0.22%.

With a $73.01 billion market cap, Goldman Sachs Group Inc. (GS) is trading with a price-earnings ratio of 7.86, a price-book ratio of 0.93 and a forward price-earnings ratio of 7.93. According to the DCF calculator, the stock has a fair value of $315.15 while trading at $198.26. The share price has fallen 24 over the last 12 months and is trading 26.53% below its 52-week high and 30.69% above its 52-week low.

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GuruFocus gives the investment banking a profitability and growth rating of 4 out of 10. The return on equity of 11.48% and return on assets of 1.10% are underperforming 69% of companies in the Global Capital Markets industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.46 is below the industry median of 5.11.

Berkshire Hathaway’s Warren Buffett (Trades, Portfolio) is the company’s largest guru shareholder with 4.98% of outstanding shares, followed by Dodge & Cox with 2.90%, Hotchkis & Wiley with 0.80% and Spiros Segalas (Trades, Portfolio) with 0.42%.

With a market cap of $46.46 billion, FedEx Corp. (FDX) is trading with a price-earnings ratio of 9.69 and a price-book ratio of 2.41. According to the DCF calculator, the stock has a fair value of $522.68 while trading at $177.98. The share price fell 29% over the last 12 months and is trading 4.84% below its 52-week high and 17.91% above its 52-week low.

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GuruFocus rated the express courier delivery firm a profitability and growth rating of 8 out of 10. The return on equity of 26.45% and return on assets of 9.57% are outperforming 85% of companies in the Global Integrated Shipping and Logistics industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.12 is below the industry median of 0.30.

The company’s largest guru shareholder is Dodge & Cox with 6.11% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 5.77%, Bill Gates (Trades, Portfolio) with 1.16% and Mason Hawkins (Trades, Portfolio)' Southeastern Asset Management with 1.01%.

Alliance Data Systems Corp. (ADS) has a market cap of $9.14 billion. It is trading with a price-earnings ratio of 9.85, a price-book ratio of 4.03 and a forward price-earnings ratio of 8.00. According to the DCF calculator, the stock has a fair value of $430.98 while trading at $172.41. The share price has fallen 25% over the last 12 months and is trading 31.11% below its 52-week high and 20.92% above its 52-week low.

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GuruFocus gives the marketing, loyalty, and credit solutions provider a profitability and growth rating of 9 out of 10. The return on equity of 45.43% and return on assets of 3.23% are outperforming 58% of companies in the Global Credit Services industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.29 is below the industry median of 8.43.

With 9.83% of outstanding shares, Jeff Ubben (Trades, Portfolio)’s ValueAct Holdings is the company’s largest guru shareholder, followed by Glenn Greenberg (Trades, Portfolio)’s Brave Warrior Advisors with 3.29%, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates with 0.94% and Jerome Dodson (Trades, Portfolio) with 0.94%.

Lear Corp. (LEA) has a market cap of $8.89 billion. The stock is trading with a price-earnings ratio of 8.28 and a price-book ratio of 2.18. According to the DCF calculator, the stock has a fair value of $184.18 while trading at about $142.18. The share price has fallen 25% over a 12-month period and is currently 31.10% below its 52-week high and 42.23% above its 52-week low.

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The company, which produces automotive seating systems and components, has a GuruFocus profitability and growth rating of 7 out of 10. The return on equity of 26.69% and return on assets of 9.50% are outperforming 83% of companies in the Global Auto Parts industry. Its financial strength is rated 7 out of 10. The cash-debt ratio of 0.76 is above the industry median of 0.61.

The company’s largest guru shareholder is Richard Pzena (Trades, Portfolio) with 4.42% of outstanding shares, followed by Simons’ firm with 0.37% and Joel Greenblatt (Trades, Portfolio)’s Gotham Asset Management with 0.15%.

Ameriprise Financial Inc. (AMP) has a market cap of $17.49 billion; the stock is trading with a price-earnings ratio of 9.09 and a price-book ratio of 3.15. According to the DCF calculator, the stock has a fair value of $151.86 while trading around $129.05. The share price has fallen 17% over the last 12 months and is trading 19.32% below its 52-week high and 34.86% above its 52-week low.

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GuruFocus gives the financial services company a profitability and growth rating of 4 out of 10. While the return on equity of 36.58% is outperforming the sector, the return on assets of 1.46% is underperforming 53% of companies in the Global Asset Management industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.64 is below the industry median of 480.

With 0.25% of outstanding shares, Dalio’s Bridgewater Associates is the company’s largest guru shareholder, followed by Pioneer Investments (Trades, Portfolio) with 0.24%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.24% and Jeremy Grantham (Trades, Portfolio)’s GMO LLC with 0.06%.

Disclosure: I do not own any stocks mentioned.

About the author:

Tiziano Frateschi
You can read about me on www.theextraincome.info, which gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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