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6 Cheap Guru Stocks

- By Tiziano Frateschi

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 $7.71 billion, Micro Focus International PLC (MFGP) is trading with a price-earnings ratio of 11.05, a price-sales ratio of 2.73 and a forward price-earnings ratio of 8.90. According to the discounted cash flow calculator, the stock has a fair value of $27 while trading at $18. The stock price has fallen 46% over the last 12 months and is currently 50.79% below its 52-week high and 40.65% above its 52-week low.

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GuruFocus gives the software company a profitability and growth rating of 9 out of 10. The return on equity of 12.17% and return on assets of 5.34% are outperforming 61% of companies in the Global Software - Application industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.12 is below the industry median of 4.27.

The company's largest shareholder among the gurus is Dodge & Cox with 10.93% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 3.35% and Paul Singer (Trades, Portfolio) with 1.45%.

With a $32.23 billion market cap, Banco Santander (Brasil) SA (BSBR) is trading with a price-earnings ratio of 14.31, a price-sales ratio of 4.11 and a forward price-earnings ratio of 9.31. According to the DCF calculator, the stock has a fair value of $3.55 while trading at $8.71. The stock price has declined 2% over the last 12 months and is currently 28.16% below its 52-week high and 20.83% above its 52-week low.

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GuruFocus gives the bank a profitability and growth rating of 4 out of 10. The return on equity of 11.85% and return on assets of 1.58% are outperforming 72% of companies in the Global Banks - Regional - Latin America industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 1.61 is above the industry median of 1.22.

Jim Simons (Trades, Portfolio) is the company's largest guru shareholder with 0.03% of outstanding shares.

With a market cap of $4.54 billion, Olin Corp. (OLN) is trading with a price-earnings ratio of 7.39, a price-sales ratio of 0.70 and a forward price-earnings ratio of 10.53. According to the DCF calculator, the stock has a fair value of $39.38 while trading at $27.20. The stock price has fallen 18% over the last 12 months and is currently 28.94 % below its 52-week high and 1.81% above its 52-week low.

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GuruFocus gives the company, which manufactures chemicals and ammunition, a profitability and growth rating of 8 out of 10. The return on equity of 24.21% and return on assets of 6.80% are outperforming 63% of companies in the Global Specialty Chemicals industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.04 is above the industry median of 0.72.

The company's largest shareholder among the gurus is Andreas Halvorsen (Trades, Portfolio) with 2.8% of outstanding shares, followed by First Eagle Investment (Trades, Portfolio) with 0.88% and Mario Gabelli (Trades, Portfolio) with 0.07%.

Senior Housing Properties Trust (SNH) has a market cap of $4.1 billion; the stock is trading with a price-earnings ratio of 8.99 and a price-sales ratio of 3.76. According to the DCF calculator, the stock has a fair value of $8.86 while trading at $17.24. The stock price has tumbled 10% over the last 12 months and is currently 12.11% below its 52-week high and 18.17% above its 52-week low.

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GuruFocus gives the real estate investment trust a profitability and growth rating of 8 out of 10. The return on equity of 14.43% and return on assets of 6.29% are outperforming 80% of companies in the Global REIT - Healthcare Facilities industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.01 is below the industry median 0.06.

Simons is the company's largest guru shareholder with 0.41% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.25%, Ken Fisher (Trades, Portfolio) with 0.05% and Ray Dalio (Trades, Portfolio) with 0.01%.

Eni SpA (NYSE:E) has a market cap of $68.18 billion. It is trading with a price-earnings ratio of 12.90, a price-sales ratio of 0.80 and a forward price-earnings ratio of 9.46. According to the DCF calculator, the stock has a fair value of $32.6 while trading at $39. The stock price has climbed 15% over a 12-month period and is currently 5.03% below its 52-week high and 20.74% above its 52-week low.

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GuruFocus gives the Italian oil and gas company a profitability and growth rating of 6 out of 10. The return on equity of 9.48% and return on assets of 3.95% are underperforming 56% of companies in the Global Oil and Gas Integrated industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 0.58 is above the industry median of 0.34.

The company's largest shareholder among the gurus is Charles Brandes (Trades, Portfolio) with 0.11% of outstanding shares.

MB Financial Inc. (MBFI) has a market cap of $3.95 billion. It is trading with a price-earnings ratio of 13.14 and a price-sales ratio of 4.07. According to the DCF calculator, the stock has a fair value of $38.53 while trading at $47. The stock price has climbed 10% over a 12-month period and is currently 8.28% below its 52-week high and 20.87% above its 52-week low.

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GuruFocus gives the financial holding company a profitability and growth rating of 4 out of 10. The return on equity of 10.73% and return on assets of 1.50% are outperforming 66% of companies in the Global Banks - Regional - U.S. industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.43 is below the industry median of 1.22.

Columbia Wanger (Trades, Portfolio) is the company's largest guru shareholder with 0.46% of outstanding shares, followed by John Rogers (Trades, Portfolio) with 0.15%, Simons with 0.1% and Paul Tudor Jones (Trades, Portfolio) with 0.02%.

Disclosure: I do not own any stocks mentioned in this article.

This article first appeared on GuruFocus.