6 Stocks With Low Price-Sales Ratios

Royal Bank of Canada tops the list

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Oct 29, 2019
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According to the GuruFocus All-In-One Screener as of Tuesday, the following companies look cheap since they are trading with low price-sales ratios.

Royal Bank of Canada (RY, Financial) is trading around $81.22 per share with a price-sales ratio of 3.38 and a price-earnings ratio of 12.09.

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The Canadian bank has a market cap of $116.31 billion. The stock has risen at an annualized rate of 7.12% over the past decade.

The discounted cash flow calculator gives the stock a fair value of $94.35, suggesting it is undervalued with a 13.92% margin of safety. The Peter Lynch value gives the stock a fair price of $99.6.

The company's largest guru shareholder is Jeremy Grantham (Trades, Portfolio) with 0.16% of outstanding shares, followed by Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.16% and Pioneer Investments (Trades, Portfolio) with 0.05%.

Eli Lilly and Co. (LLY, Financial) is trading around $112 per share with a price-sales ratio of 4.69 and a price-earnings ratio of 13.75.

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The company, which manufactures aesthetics, ophthalmology and women's health products, has a market cap of $106.39 billion. The stock has risen at an annualized rate of 14.44% over the last 10 years.

The DCF calculator gives the stock a fair value of $46.77, suggesting it is overpriced by 135%. The Peter Lynch value gives the stock a fair price of $65.55.

With 4.47% of outstanding shares, PRIMECAP Management (Trades, Portfolio) is the company's largest guru shareholder, followed by the Vanguard Health Care Fund (Trades, Portfolio) with 1.39%, Dodge & Cox with 0.92% and Pioneer Investments with 0.56%.

Lockheed Martin Corp. (LMT, Financial) is trading around $370.73 with a price-sales ratio of 1.81 and a price-earnings ratio of 17.62.

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The company, which operates in the aerospace and defense industry, has a market cap of $104.18 billion. The stock has risen at an annualized rate of 19.45% over the past decade.

The DCF calculator gives the company a fair value of $229.48, suggesting it is overpriced by 61%. The Peter Lynch value gives the stock a fair price of $315.16.

The company's largest guru shareholder is Ken Heebner (Trades, Portfolio) with 0.04% of outstanding shares, followed by Joel Greenblatt (Trades, Portfolio) with 0.04%, Grantham with 0.02% and Louis Moore Bacon (Trades, Portfolio) with 0.02%.

Starbucks Corp. (SBUX, Financial) is trading around $83.38 with a price-sales ratio of 4.05 and a price-earnings ratio of 29.57.

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The company, which sells coffee, espresso, teas and cold blended beverages, has a market cap of $99.81 billion. The stock has risen at an annualized rate of 24.43% over the last 10 years.

The DCF calculator gives the company a fair value of $80.28, suggesting it is overpriced by 3.86%. The Peter Lynch value gives the stock a fair price of $42.3.

With 0.76% of outstanding shares, Simons’ firm is the company's largest guru shareholder, followed by Bill Ackman (Trades, Portfolio) with 0.75%, Pioneer Investments with 0.15% and David Rolfe (Trades, Portfolio) with 0.05%.

Bristol-Myers Squibb Co. (BMY, Financial) is trading around $56 with a price-sales ratio of 3.77 and a price-earnings ratio of 14.47.

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The manufacturer of drugs for various indications has a market cap of $89.93 billion. The stock has risen at an annualized rate of 12.08% over the past decade.

The DCF calculator gives the company a fair value of $40.67, suggesting it is overpriced by 35.17%. The Peter Lynch value gives the stock a fair price of $57.

The company's largest guru shareholder is the Vanguard Health Care Fund with 3.12% of outstanding shares, followed by Dodge & Cox with 3.03%, PRIMECAP Management with 1.33% and Seth Klarman (Trades, Portfolio) with 0.79%.

U.S. Bancorp (USB, Financial) is trading around $56.74 with a price-sales ratio of 4.01 and a price-earnings ratio of 13.07.

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The financial services company has a market cap of $89.41 billion. The stock has risen at an annualized rate of 10.19% over the last 10 years.

The DCF calculator gives the company a fair value of $72.46, suggesting it is undervalued with a 21.69% margin of safety. The Peter Lynch value gives the stock a fair price of $65.1.

With 8.41% of outstanding shares, Warren Buffett (Trades, Portfolio) is the company's largest guru shareholder, followed by Barrow, Hanley, Mewhinney & Strauss with 1.56%, First Eagle Investment (Trades, Portfolio) with 0.74% and Chris Davis (Trades, Portfolio) 0.57%.

Disclosure: I do not own any stocks mentioned.

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