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3 Stocks with Low Forward Price-Earnings Ratios

GuruFocus.com
·3 mins read

In order to increase your chances to come across stocks that hold value, one method is to search for stocks with an attractive forward price-earnings ratio.

For the purposes of this article, I will look at stocks with a forward price-earnings ratio that is lower than the S&P 500 index's historical average of 15. The S&P 500 is a benchmark for the U.S. market.

Smith Micro Software Inc


The first company under consideration is Smith Micro Software Inc (NASDAQ:SMSI), a Pittsburgh, Pennsylvania-based developer and seller of software applications to wireless and mobile network operators worldwide.

Smith Micro Software has a forward price-earnings ratio of 12.5 (compared to the industry median of 23.75), which is the result of a share price of $4.50 as of April 27 and analyst expectations of 24% growth in earnings per share over the next full fiscal year.

The stock price has risen by almost 58% in the past year, determining a market cap of $1.62 billion and a 52-week range of $26.72 to $53.04.

The stock has an overweight recommendation rating on Wall Street and an average target price of $51.73.

Of the top fundholders with stakes in Smith Micro Software Inc, Vanguard Group Inc is the largest investor with 4.84% of outstanding shares, followed by Black Rock Inc. with 1.28% and Millennium Management LLC with 0.83%.

Silicon Motion Technology Corp

The second company under consideration is Silicon Motion Technology Corp (NASDAQ:SIMO), a Hong Kong-based manufacturer and marketer of semiconductors.

Silicon Motion Technology has a forward price-earnings ratio of 14.53, which results from Monday's closing share price of $44.77 and analyst expectations of $3.09 in EPS for the next full fiscal year.

The stock price has risen by almost 20% in the past year and now has a market cap of $1.62 billion and a 52-week range of $2.75 to $7.15.

The stock has a buy recommendation rating on Wall Street and an average target price of $9.38.

With a 25.90% stake, Cardinal Capital Management LLC/CT is the company's largest top fundholder. Yiheng Capital LLC owns 21.65% of shares outstanding and Massachusetts Financial Services Co /MA/ owns 10.45%.

F5 Networks Inc

The third company under consideration is F5 Networks Inc (NASDAQ:FFIV), a Seattle-based provider of multi-cloud application services and delivery networking.

F5 Networks Inc has a forward price-earningsratio of 13.81 versus the industry median of 23.75. The stock's forward price-earnings ratio is the result of a share price of $130.92 as of April 27 and analyst expectations of 70% growth in EPS over the next full fiscal year.

The stock price has fallen by almost 18% in the past year, determining a market cap of $7.96 billion and a 52-week range of $79.78 to $168.94.

The stock has a hold recommendation rating on Wall Street and an average target price of $139.47 per share.

Of the top fundholders with stakes in F5 Networks Inc, Vanguard Group Inc is the largest investor with 11.16% of outstanding shares. Other top fund holders include Black Rock Inc. with 7.96% and State Street Corp with 5.04%.

Disclosure: I have no positions in any securities mentioned in this article.

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This article first appeared on GuruFocus.