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5 Eerily Low Price-Sales Stocks With High Financial Strength

As investors prepare for Halloween, a holiday where people trick-or-treat and scare away ghosts, five stocks with strong financial strength and trade near historically low price-sales ratios are Infosys Ltd. (NYSE:INFY), NetEase Inc. (NASDAQ:NTES), Cognizant Technology Solutions Corp. (NASDAQ:CTSH), Cardinal Health Inc. (NYSE:CAH) and ScanSource Inc. (NASDAQ:SCSC).


Markets soar on strong earnings and U.S.-China trade deal optimism

On Friday, the Dow Jones Industrial Average closed at 26,958.06, 152.53 points higher than Thursday's close of 26,805.53. Dow member Intel Corp. (NASDAQ:INTC) contributed to the gains: Shares of the Santa Clara, California-based semiconductor company gained over 8% on the heels of reporting earnings and guidance that outperformed analysts' expectations.

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CNBC added markets also received a boost on the U.S. Trade Representative's comments that China and the U.S. were close to finalizing phase one of their trade deal.

Historical low-price sales screener overview

The historical low-price sales screener lists the stocks that have predictable revenue and earnings growth over the past 10 years that are trading at a price-sales ratio within 30% higher than historical lows. Gurus like Arnold Van Den Berg (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) seek low price-sales stocks in their investing strategies.

Infosys

According to the low-price sales screen, Infosys is trading around 3.65% higher than its 52-week low.

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The Indian consulting and information technology services company provides services like management consulting, application and infrastructure management, application outsourcing and business processing. GuruFocus ranks the company's financial strength and profitability 9 out of 10 on several positive investing signs, which include robust interest coverage, a strong Altman Z-score of 11.45 and operating margins that outperform 88.83% of global competitors despite contracting over the past five years.

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Gurus with large holdings in Infosys include Fisher, Jeremy Grantham (Trades, Portfolio) and Howard Marks (Trades, Portfolio)' Oaktree Capital Management.

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NetEase

NetEase provides a wide range of online services, which include mobile games, media, email and commerce. GuruFocus ranks the Beijing-based company's financial strength 8 out of 10 on several positive investing signs, which include no long-term debt, a strong Altman Z-score of 5.45 and a solid Piotroski F-score of 7.

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Gurus with large holdings in NetEase include Philippe Laffont (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).

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Cognizant

Teaneck, New Jersey-based Cognizant provides technology consulting, application outsourcing, systems integration, business process services and cloud services. GuruFocus ranks the company's financial strength 8 out of 10 on several positive investing signs, which include robust interest coverage and a solid Altman Z-score of 6.98.

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Gurus with holdings in Cognizant include Dodge & Cox and former U.S. Vice President Al Gore (Trades, Portfolio).

Cardinal Health

Dublin, Ohio-based Cardinal Health distributes pharmaceuticals and medial supplies to pharmacies and hospitals. GuruFocus ranks the company's profitability 8 out of 10 on several positive investing signs, which include a strong Piotroski F-score of 7 and a return on equity that outperforms 94.64% of global competitors. Despite this, Cardinal Health's operating margin has declined over the past five years and is underperforming 68.97% of global medical distribution companies.

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ScanSource

Greenville, South Carolina-based ScanSource provides value-added services for technology manufacturers and sells to retailers in specialty technology markets. GuruFocus ranks the company's financial strength 6 out of 10: ScanSource has a strong Altman Z-score of 3.51 despite a debt-to-Ebitda ratio of 2.82, a ratio that underperforms 61.46% of global competitors.

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Disclosure: No positions.

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This article first appeared on GuruFocus.