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Tiziano Frateschi
Tiziano Frateschi
Articles (2159)  | Author's Website |

5 Companies With Low Price-Earnings Ratios

Rio Tinto tops the list

June 12, 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 $98.89 billion, Rio Tinto PLC (NYSE:RIO) is trading with a price-earnings ratio of 5.57 and a price-book ratio of 2.26. According to the DCF calculator, the stock has a fair value of $113.12 while trading at $60. The price was stable over the last 12 months and is now 7.27% below the 52-week high and 31.49% above the 52-week low.

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GuruFocus gives the miner a profitability and growth rating of 8 out of 10. The return on equity of 31.92% and return on assets of 15.11% are outperforming 91% of companies in the Industrial Metals and Minerals industry. Its financial strength is rated 7 out of 10. The cash-debt ratio of 1.05 is below the industry median of 17.17.

The company’s largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.59% of outstanding shares, followed by Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.04% and Steven Cohen (Trades, Portfolio) with 0.01%.

With a $74.20 billion market cap, Banco Santander SA (NYSE:SAN) is trading with a price-earnings ratio of 9.53 and a price-book ratio of 0.69. According to the DCF calculator, the stock has a fair value of $5.24 while trading at $4.49. Shares have fallen 20% over the last 12 months. They are currently 21.71% below the 52-week high and 6.65% above the 52-week low.

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GuruFocus gives the bank a profitability and growth rating of 2 out of 10. The return on equity of 7.49% and return on assets of 0.52% are underperforming 52% of companies in the Banks – Global industry. Its financial strength is rated 5 out of 10 with no debt.

Fisher is the company’s largest guru shareholder with 1.28% of outstanding shares.

With a market cap of $72.82 billion, Morgan Stanley (NYSE:MS) is trading with a price-earnings ratio of 9.29 and a price-book ratio of 1.01. According to the DCF calculator, the stock has a fair value of $49.87 while trading at $43.29. Shares have fallen 15% over the last 12 months and are currently trading 17.45% below the 52-week high and 17.83% above the 52-week low.

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GuruFocus gives the investment bank a profitability and growth rating of 4 out of 10. While the return on equity of 10.06% is outperforming the industry, the return on assets of 0.98% is underperforming 64% of companies in the Capital Markets industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 0.26 is below industry median of 5.11.

The company’s largest guru shareholder is Jeff Ubben (Trades, Portfolio)’s ValueAct Holdings with 1.56% of outstanding shares, followed by Richard Pzena (Trades, Portfolio) with 0.53%, the T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.46% and Pioneer Investments (Trades, Portfolio) with 0.37%.

Goldman Sachs Group Inc. (NYSE:GS) has a market cap of $71.02 billion and is trading with a price-earnings ratio of 8.08 and a price-book ratio of 0.94. According to the DCF calculator, the stock has a fair value of $299.43 while trading at $191. Shares have fallen 16% over the last 12 months and are currently trading 20.79% below the 52-week high and 27.96% above the 52-week low.

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GuruFocus give the investment bank a profitability and growth rating of 4 out of 10. The return on equity of 10.64% and return on assets of 1.04% are underperforming 68% of companies in the Capital Markets industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 0.30 is below the industry median of 5.11.

With 5.02% of outstanding shares, Warren Buffett (Trades, Portfolio) is the company’s largest guru shareholder, followed by Dodge & Cox with 3.11% and Hotchkis & Wiley with 0.81%.

ConocoPhillips (NYSE:COP) has a market cap of $66.97 billion. Its shares are trading with a price-earnings ratio of 9.57 and a price-book ratio of 2.07. According to the DCF calculator, the stock has a fair value of $66.24 while trading at $58. Shares have fallen 14% over a 12-month period and are currently trading 26.15% below the 52-week high and 4.42% above the 52-week low.

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The oil and gas producer has a GuruFocus profitability and growth rating of 6 out of 10. The return on equity of 22.74% and return on assets of 10.24% are outperforming 51% of companies in the Oil & Gas E&P industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.55 is below the industry median of 0.51.

The company’s largest guru shareholder is Barrow, Hanley, Mewhinney & Strauss with 1.24% of outstanding shares, followed by Fisher with 0.35% and Simons’ firm with 0.33%.

Disclosure: I do not own any stocks mentioned.

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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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