Low P/E Stocks Gurus Are Buying
- By Tiziano Frateschi
Here are six stocks gurus are buying that are trading with low price-earnings (P/E) ratios. Some of them are great investments; others need a double check, according to the DCF calculator.
Warning! GuruFocus has detected 3 Warning Signs with SC. Click here to check it out.
The intrinsic value of SC
GameStop Corp. Class A (GME) with a market cap of $2.49 billion is trading with a P/E ratio of 6.57 and a price-sales (P/S) ratio of 0.28. According to the DCF calculator the stock has a fair value of $39.81 while trading at about $24.49. The price has dropped by 9% during the last 12 months and is now 27.37% below its 52-week high and 21.84% above its 52-week low.
The company is a multichannel video game retailer. It sells new and preowned video game hardware, physical and digital video game software and accessories as well as PC entertainment software and new and preowned mobile and consumer electronics products.
Two hedge funds hold the company. The gurus holding the largest portions of outstanding shares are NWQ Managers (Trades, Portfolio) with 1.93% followed by Jim Simons (Trades, Portfolio) with 0.86%.
Validus Holdings Ltd. (VR) with a market cap of $4.52 billion is trading with a P/E ratio of 11.26 and a P/S ratio of 1.93. According to the DCF calculator the stock has a fair value of $54.04 while trading at about $57, overpriced by 5%. The price has risen by 30% during the last 12 months and is now 1.20% below its 52-week high and 33.33% above its 52-week low.
The company provides reinsurance and insurance services. The company's business segments are Validus Re, AlphaCat, Talbot and Western World.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Richard Pzena (Trades, Portfolio) with 0.88%, Simons with 0.34% and Steven Cohen (Trades, Portfolio) with 0.05%.
Tenneco Inc. (TEN) with a market cap of $3.71 billion is trading with a P/E ratio of 9.82 and a P/S ratio of 0.46. According to the DCF calculator the stock has a fair value of $73.41 while trading at about $67.45 undervalued with a margin of safety of 8%. The price has risen by 42% during the last 12 months and is now 2.13% below its 52-week high and 95.79% above its 52-week low.
The company produces clean air and ride performance products and systems for light vehicle, commercial truck, off-highway and other vehicle applications. It serves original equipment vehicle manufacturers and repair and replacement markets or aftermarket.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Columbia Wanger (Trades, Portfolio) with 2.31%, Mario Gabelli (Trades, Portfolio) with 1.25% and Diamond Hill Capital (Trades, Portfolio) with 1.06%.
Arrow Electronics Inc. (ARW) with a market cap of $6.59 billion is trading with a P/E ratio of 13.35 and a P/S ratio of 0.28. According to the DCF calculator the stock has a fair value of $59.39 while trading at about $73.52, overpriced by 24%. The price has risen by 45% during the last 12 months and is now 1.20% below its 52-week high and 48.89% above its 52-week low.
The company is a provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Jeremy Grantham (Trades, Portfolio) with 0.99%, First Pacific Advisors (Trades, Portfolio) with 0.62% and FPA Capital Fund (Trades, Portfolio) with 0.34%.
Pitney Bowes Inc. (PBI) with a market cap of $15.92 billion is trading with a P/E ratio of 11.57 and a P/S ratio of 0.86. According to the DCF calculator the stock has a fair value of $14.34 while trading at about $15.92, overpriced by 11%. The price has dropped by 18% during the last 12 months and is now 27.01 below its 52-week high and 11.95% above its 52-week low.
It is a technology company that offers products and solutions that enable commerce in the areas of customer information management, location intelligence, customer engagement, shipping and mailing and e-commerce.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are First Eagle Investment (Trades, Portfolio) with 3.15%, Joel Greenblatt (Trades, Portfolio) with 0.37% and Simons with 0.17%.
Lear Corp. (LEA) with a market cap of $9.98 billion is trading with a P/E ratio of 10.69 and a P/S ratio of 0.56. According to the DCF calculator the stock has a fair value of $142.65 while trading at about $141.09. The price has risen by 35% during the last 12 months and is now 4.31% below its 52-week high and 51.90% above its 52-week low.
The company is engaged in the business of supplying seating and electrical distribution systems and related components.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are Grantham with 0.66%, Greenblatt with 0.44% and Pioneer Investments (Trades, Portfolio) with 0.06%.
Santander Consumer USA Holdings Inc. (SC) with a market cap of $4.74 billion is trading with a P/E ratio of 6.18 and a P/S ratio of 1.00. According to the DCF calculator the stock has a fair value of $22.79 while trading at about $13.22 with a margin of safety of 42%. The price has risen by 31% during the last 12 months and is now 12.28% below its 52-week high and 54.80% above its 52-week low.
The company is engaged in indirect origination of retail installment contracts principally through manufacturer-franchised dealers in connection with their sale of used and new automobiles and light-duty trucks to retail consumers.
Three hedge funds hold the company. The gurus holding the largest portions of outstanding shares are HOTCHKIS & WILEY with 1.05%, Cohen with 0.26% and Simons with 0.12%.
Disclosure: I do not own any shares of any stocks mentioned in this article.
Start a free seven-day trial of Premium Membership to GuruFocus.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 3 Warning Signs with SC. Click here to check it out.
The intrinsic value of SC
