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 $252.92 billion, Bank of America Corporation (BAC, Financial) is trading with a price-earnings ratio of 9.89 and a price-book ratio of 1.06. According to the DCF calculator, the stock has a fair value of $28.79 while trading at $26.6. Shares have fallen 9% over the last 12 months and are now 16.64% below the 52-week high and 17.39% above the 52-week low.
GuruFocus gives the bank a profitability and growth rating of 3 out of 10. The return on equity of 10.22% and return on assets of 1.22% are outperforming 53% of companies in the Banks - Global industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.73 is below the industry median of 1.43.
The company’s largest guru shareholder is Warren Buffett (Trades, Portfolio) with 9.43% of outstanding shares, followed by Dodge & Cox with 1.21% and PRIMECAP Management (Trades, Portfolio) with 0.38%.
With a $199.41 billion market cap, Wells Fargo & Co. (WFC, Financial) is trading with a price-earnings ratio of 9.82 and a price-book ratio of 1.16. According to the DCF calculator, the stock has a fair value of $91.27 while trading at $44.37. Shares have fallen 19% over the last 12 months. They are currently 25.46% below the 52-week high and 3.14% above the 52-week low.
GuruFocus gives the bank a profitability and growth rating of 3 out of 10. The return on equity of 10.70% and return on assets of 1.22% are outperforming 54% of companies in the Banks – Global industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.60 is below the industry median 1.43.
Buffett is the company’s largest guru shareholder with 9.12% of outstanding shares, followed by Dodge & Cox with 1.82% and PRIMECAP Management with 1.02%.
With a market cap of $197.17 billion, Intel Corp. (INTC, Financial) is trading with a price-earnings ratio of 9.96 and a price-book ratio of 2.72. According to the DCF calculator, the stock has a fair value of $71.42 while trading at $44. Shares have fallen 22% over the last 12 months and are currently trading 26.09% below the 52-week high and 3.97% above the 52-week low.
GuruFocus gives the chipmaker a profitability and growth rating of 8 out of 10. The return on equity of 28.37% and return on assets of 16.07% are outperforming 79% of companies in the Semiconductors industry. Its financial strength is rated 7 out of 10. The cash-debt ratio of 0.42 is below industry median of 1.69.
The company’s largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.57% of outstanding shares, followed by PRIMECAP Management with 0.55%, Pioneer Investments (Trades, Portfolio) with 0.17% and Bill Nygren (Trades, Portfolio) with 0.15%.
Toyota Motor Corp. (TM, Financial) has a market cap of $165.31 billion and is trading with a price-earnings ratio of 9.92 and a price-book ratio of 0.98. According to the DCF calculator, the stock has a fair value of $123.92 while trading at $118. Shares have fallen 12% over the last 12 months and are currently trading 14.52% below the 52-week high and 5.81% above the 52-week low.
GuruFocus gave the automaker a profitability and growth rating of 6 out of 10. While the return on equity of 9.75% is outperforming the sector, the return on assets of 3.66% is underperforming 50% of companies in the Auto Manufacturers industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.29 is below the industry median of 0.61.
With 3.0.06% of outstanding shares, Jim Simons (Trades, Portfolio)’ Renaissance Technologies is the company’s largest guru shareholder, followed by NWQ Managers (Trades, Portfolio) with 0.02% and Charles Brandes (Trades, Portfolio) with 0.01%.
Citigroup Inc. (C, Financial) has a market cap of $143.72 billion. Its shares are trading with a price-earnings ratio of 9.03 and a price-book ratio of 0.82. According to the DCF calculator, the stock has a fair value of $73.63 while trading at $62.15. Shares have fallen 7% over a 12-month period and are currently trading 17.40% below the 52-week high and 28.36% above the 52-week low.
The bank has a GuruFocus profitability and growth rating of 3 out of 10. The return on equity of 8.45% and return on assets of 0.94% are underperforming 59% of companies in the Banks - Global industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.73 is below the industry median of 1.43.
The company’s largest guru shareholder is Jeff Ubben (Trades, Portfolio)’s ValueAct Holdings with 1.36% of outstanding shares, followed by Hotchkis & Wiley with 0.54% and Diamond Hill Capital (Trades, Portfolio) with 0.44%.
Disclosure: I do not own any stocks mentioned.
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