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Tiziano Frateschi
Tiziano Frateschi
Articles (2146)  | Author's Website |

6 Cheap Stocks With a Margin of Safety

Citigroup tops the list

September 16, 2019 | About:

As of Monday, the GuruFocus All-in-One Screener found 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 $159.01 billion, Citigroup Inc. (NYSE:C) is trading with a price-earnings ratio of 9.78. According to the DCF calculator, the stock has a fair value of $77.05 while trading at about $70.40. The price was stable over the last 12 months and is now 6.45% below the 52-week high and 45.37% above the 52-week low.

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GuruFocus gives the financial services company a profitability and growth rating of 3 out of 10. The return on equity of 8.66% and return on assets of 0.95% are underperforming 59% of companies in the Banks industry. Its financial strength is rated 3.6 out of 10. The cash-debt ratio of 0.69 is below the industry median of 1.15.

The company’s largest guru shareholder is Jeff Ubben (Trades, Portfolio)’s ValueAct Holdings with 1.40% of outstanding shares, followed by Diamond Hill Capital (Trades, Portfolio) with 0.43% and Bill Nygren (Trades, Portfolio) with 0.39%.

With a $79.07 billion market cap, Goldman Sachs Group Inc. (NYSE:GS) is trading with a price-earnings ratio of 9.22. According to the DCF calculator, the stock has a fair value of $297.31 while trading at $217. The share price has declined 3.49% over the last 12 months. It is now trading 7.81% below the 52-week high and 44.96% above the 52-week low.

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GuruFocus gives the investment bank a profitability and growth rating of 3 out of 10. While the return on equity of 10.29% is outperforming the sector, the return on assets of 1.03% is underperforming 79% of companies in the Brokers and Exchanges industry. Its financial strength is rated 3.2 out of 10. The cash-debt ratio of 0.31 is below the industry median of 2.88.

Warren Buffett (Trades, Portfolio) is the company’s largest guru shareholder with 5.10% of outstanding shares, followed by Dodge & Cox with 3.20% and Hotchkis & Wiley with 0.95%.

With a market cap of $74.64 billion, Morgan Stanley (NYSE:MS) is trading with a price-earnings ratio of 9.84 and a price-book ratio of 1.05. According to the DCF calculator, the stock has a fair value of $49.12 while trading at about $45.16. Shares have fallen 5.27% over the last 12 months and are now trading 10.34% below the 52-week high and 22.92% above the 52-week low.

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GuruFocus gives the company a profitability and growth rating of 3 out of 10. While the return on equity of 9.67% is outperforming the sector, the return on assets of 0.95% is underperforming 80% of companies in the Brokers and Exchanges industry. Its financial strength is rated 3.2 out of 10. The cash-debt ratio of 0.25 is below the industry median of 2.88.

The company’s largest guru shareholder is Ubben’s firm with 1.59% of outstanding shares, followed by Richard Pzena (Trades, Portfolio) with 0.54% and the T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.46%.

Equinor ASA (NYSE:EQNR) has a market cap of $67.39 billion and is trading with a price-earnings ratio of 8.65 and a price-book ratio of 1.49. According to the DCF calculator, the stock has a fair value of $26.33 while trading at $19.43. Shares have declined 26% over the last 12 months and are currently trading 32.84% below the 52-week high and 19.64% above the 52-week low.

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GuruFocus gives the oil and gas company a profitability and growth rating of 7 out of 10. The return on equity of 19.24% and return on assets of 7.06% are outperforming 71% of companies in the Oil and Gas – Integrated industry. Its financial strength is rated 5.8 out of 10. The cash-debt ratio of 0.51 is above the industry median of 0.34.

With 0.28% of outstanding shares, Jim Simons (Trades, Portfolio)’ Renaissance Technologies is the company’s largest guru shareholder, followed by Ken Fisher (Trades, Portfolio) with 0.07% and Steven Cohen (Trades, Portfolio) with 0.03%.

Micron Technology Inc. (NASDAQ:MU) has a market cap of $55.74 billion. Its shares are trading with a price-earnings ratio of 5.83 and a price-book ratio of 1.58. According to the DCF calculator, the stock has a fair value of $91.28 while trading at $50.5. Shares have risen 15% over a 12-month period and are currently trading 1.73% below the 52-week high and 77.88% above the 52-week low.

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The company, which provides DRAM for personal computers and servers, has a GuruFocus profitability and growth rating of 9 out of 10. The return on equity of 30.59% and return on assets of 22.53% are outperforming 92% of companies in the Semiconductors industry. Its financial strength is rated 8.2 out of 10. The cash-debt ratio of 1.36 is above the industry median of 1.35.

The company’s largest guru shareholder is PRIMECAP Management (Trades, Portfolio) with 5.23% of outstanding shares, followed by Simons’ firm with 0.88% and Andreas Halvorsen (Trades, Portfolio) with 0.58%.

General Motors Co. (NYSE:GM) has a market cap of $55.48 billion. Its shares are trading with a price-earnings ratio of 5.98 and a price-book ratio of 1.31. According to the DCF calculator, the stock has a fair value of $67.31 while trading at $37.60. Shares have risen 10.97% over a 12-month period and are currently trading 7.26% below the 52-week high and 27.16% above the 52-week low.

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The company has a GuruFocus profitability and growth rating of 6 out of 10. While the return on equity of 22.9% is outperforming the sector, the return on assets of 4.02% is underperforming 55% of companies in the Autos industry. Its financial strength is rated 4.6 out of 10. The cash-debt ratio of 0.23 is below the industry median of 0.47.

The company’s largest guru shareholder is Buffett with 5.06% of outstanding shares, followed by Hotchkis & Wiley with 1.16% and Nygren with 0.68%.

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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