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Tiziano Frateschi
Tiziano Frateschi
Articles (2038)  | Author's Website |

6 Guru Stocks With Low Price-Earnings Ratios

Gap makes the list

July 05, 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 $7 billion, Old Republic International Corp. (NYSE:ORI) is trading with a price-earnings ratio of 8.94. According to the DCF calculator, the stock has a fair value of $27.72 while trading at $23.16. The share price has risen 16% over the last 12 months and is now 23.19% below the 52-week high and 18.44% above the 52-week low.

GuruFocus gives the provider of specialized insurance products a profitability and growth rating of 3 out of 10. The return on equity of 14.82% and return on assets of 3.98% are outperforming 74% of companies in the Insurance - Diversified industry. Its financial strength is rated 4.2 out of 10. The cash-debt ratio of 0.10 is below the industry median of 12.64.

The company’s largest guru shareholder is Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 3.02% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.54%,Charles Brandes (Trades, Portfolio) with 0.12% and Ken Fisher (Trades, Portfolio) with 0.06%.

With a $6.81 billion market cap, Gap Inc. (NYSE:GPS) is trading with a price-earnings ratio of 6.52 and a price-book ratio of 1.94. According to the DCF calculator, the stock has a fair value of $29.64 while trading at $18.04. The share price has fallen 43% over the last 12 months. It is currently 15.26% below the 52-week high and 19.97% above the 52-week low.

GuruFocus gives the apparel and accessories retailer a profitability and growth rating of 7 out of 10. The return on equity of 31.17% and return on assets of 11.73% are outperforming 73% of companies in the Apparel Stores industry. Its financial strength is rated 6.5 out of 10. The cash-debt ratio of 0.97 is above the industry median of 0.67.

Dodge & Cox is the company’s largest guru shareholder with 4.66% of outstanding shares, followed by Pioneer Investments with 0.64% and Joel Greenblatt (Trades, Portfolio) with 0.06%.

With a market cap of $6.90 billion, Encana Corp. (NYSE:ECA) is trading with a price-earnings ratio of 6.38 and a price-book ratio of 0.55. According to the DCF calculator, the stock has a fair value of $8.03 while trading at $4.89. Shares have fallen 61% over the last 12 months and are currently trading 65.62% below the 52-week high and 7.68% above the 52-week low.

GuruFocus gives the independent oil and gas producer a profitability and growth rating of 5 out of 10. The return on equity of 9.16% and return on assets of 4.17% are underperforming 62% of companies in the Oil and Gas E&P industry. Its financial strength is rated 4.8 out of 10. The cash-debt ratio of 0.07 is below the industry median of 0.82.

The company’s largest guru shareholder is Sarah Ketterer (Trades, Portfolio) with 8.35% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 2.92% and Steve Mandel (Trades, Portfolio) with 2.55%.

Enel Chile SA (NYSE:ENIC) has a market cap of $6.65 billion and is trading with a price-earnings ratio of 9.56 and a price-book ratio of 1.25. According to the DCF calculator, the stock has a fair value of $5.35 while trading at $4.70. The share price has declined 5% over the last 12 months and is currently trading 12.75% below the 52-week high and 27.03% above the 52-week low.

GuruFocus gives the electric utility company a profitability and growth rating of 7 out of 10. The return on equity of 13.85% and return on assets of 6.49% are outperforming 71% of companies in the Utilities - Regulated Electric industry. Its financial strength is rated 4.9 out of 10. The equity-asset ratio of 0.48 is above the industry median of 0.36.

With 0.40% of outstanding shares, Brandes is the company’s largest guru shareholder, followed by Simons' firm with 0.09%.

Steel Dynamics Inc. (NASDAQ:STLD) has a market cap of $6.67 billion. Its shares are trading with a price-earnings ratio of 5.65 and a price-book ratio of 1.68. According to the DCF calculator, the stock has a fair value of $56.72 while trading at $30. Shares have fallen 33% over a 12-month period and are currently trading 15.66% below the 52-week high and 13.53% above the 52-week low.

The steel manufacturer has a GuruFocus profitability and growth rating of 8 out of 10. The return on equity of 32.17% and return on assets of 16.32% are outperforming 91% of companies in the Steel industry. Its financial strength is rated 6.9 out of 10. The cash-debt ratio of 0.40 is above the industry median of 0.31.

The company’s largest guru shareholder is Fisher with 0.16% of outstanding shares, followed by Simons' firm with 0.15%, Pioneer Investments with 0.12% and Paul Tudor Jones (Trades, Portfolio) with 0.10%.

Macy's Inc. (NYSE:M) has a market cap of $6.52 billion and is trading with a price-earnings ratio of 6.07 and a price-book ratio of 1.04. According to the DCF calculator, the stock has a fair value of $37.99 while trading at $21.60. The share price has fallen 42% over the last 12 months and is currently trading 49.34% below the 52-week high and 6.26% above the 52-week low.

GuruFocus gives the department store a profitability and growth rating of 5 out of 10. The return on equity of 18.30% and return on assets of 5.57% are outperforming 55% of companies in the Department Stores industry. Its financial strength is rated 5.5 out of 10. The cash-debt ratio of 0.10 is above the industry median of 0.67.

With 1.17% of outstanding shares, Simons’ firm is the company’s largest guru shareholder, followed by Ray Dalio (Trades, Portfolio) with 0.50% and Greenblatt  with 0.13%.

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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