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6 Gurus' Stocks With Low Price-Earnings Ratios

- 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 $4.08 billion, Marriott Vacations Worldwide Corp. (VAC) is trading with a price-earnings ratio of 12.19, a price-sales ratio of 1.13 and a forward price-earnings ratio of 10.20. According to the discounted cash flow calculator, the stock has a fair value of $75.98 while trading at $86. The stock price has fallen 34% over the last 12 months and is currently 43.83% below its 52-week high and 3.34% above its 52-week low.

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GuruFocus gives the owner of holiday resorts a profitability and growth rating of 7 out of 10. The return on equity of 19.19% and return on assets of 6.99% are outperforming 75% of companies in the Global Resorts and Casinos industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.41 is below the industry median of 0.71.

The company's largest guru shareholder is Ron Baron (Trades, Portfolio) with 5.73% of outstanding shares, followed by Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.27% and Ken Heebner (Trades, Portfolio) with 0.15%.

With a $104.2 billion market cap, Royal Bank of Canada (RY) is trading with a price-earnings ratio of 11.82, a price-sales ratio of 3.25 and a forward price-earnings ratio of 10.54. According to the DCF calculator, the stock has a fair value of $82.09 while trading at $72.48. The stock price has fallen 8% over the last 12 months and is currently 16.79% below its 52-week high and 0.54% above its 52-week low.

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GuruFocus gives the banking company a profitability and growth rating of 3 out of 10. The return on equity of 15.72% and return on assets of 0.96% are outperforming 55% of companies in the Global Banks - Global industry. Its financial strength is rated 5 out of 10. The cash-debt ratio of 8.89 is above the industry median of 1.22.

Simons' Renaissance Technologies is the company's largest shareholder among the gurus with 0.11% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.1% and Ray Dalio (Trades, Portfolio) with 0.4% and Pioneer Investments (Trades, Portfolio) with 0.04%.

With a market cap of $5.72 billion, People's United Financial Inc. (PBCT) is trading with a price-earnings ratio of 13.20, a price-sales ratio of 3.44 and a forward price-earnings ratio of 10.72. According to the DCF calculator, the stock has a fair value of $19.53 while trading at $15.44. The stock price fell 18% over the last 12 months and is currently 23.79% below its 52-week high and 2.66% above its 52-week low.

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GuruFocus gives the bank holding company, a profitability and growth rating of 4 out of 10. While the return on equity of 7.30% is underperforming the sector, return on assets of 1.00% is outperforming 53% of companies in the Global Banks - Regional - U.S. industry. Its financial strength is rated 3 out of 10. The cash-debt ratio of 0.13 is below the industry median of 1.22.

The company's largest shareholder among the gurus is Pioneer Investments (Trades, Portfolio) with 0.35% of outstanding shares, followed by Simons with 0.27%, Dalio with 0.02% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.

CNA Financial Corp. (CNA) has a market cap of $11.62 billion; the stock is trading with a price-earnings ratio of 12.56, a price-sales ratio of 1.17 and a forward price-earnings ratio of 10.09. According to the DCF calculator, the stock has a fair value of $36.49 while trading at $42.8. The stock price fell 16% over the last 12 months and is currently 23.05% below its 52-week high and 1.49% above its 52-week low.

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GuruFocus gives the insurance holding company a profitability and growth rating of 1 out of 10. The return on equity of 7.83% and return on assets of 1.63% are underperforming 55% of companies in the Global Insurance - Property and Casualty industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.11 is below the industry median of 2.82.

Donald Smith (Trades, Portfolio) is the company's largest guru shareholder with 0.69% of outstanding shares, followed by the Simons with 0.24%, PRIMECAP Management (Trades, Portfolio) with 0.11% and NWQ Managers (Trades, Portfolio) with 0.11%.

Lions Gate Entertainment Corp. Class B (LGF.B) has a market cap of $4.1 billion. It is trading with a price-earnings ratio of 13.6 and a price-sales ratio of 1. According to the DCF calculator, the stock has a fair value of $14 while trading at about $18. The stock price fell 33% over a 12-month period and is currently 45.92% below its 52-week high and 5.26% above its 52-week low.

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GuruFocus gives the entertainment company a profitability and growth rating of 6 out of 10. The return on equity of 9.72% and return on assets of 3.31% are outperforming 56% of companies in the Global Media - Diversified industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.11 is below the industry median of 0.82.

The company's largest shareholder among the gurus is PRIMECAP Management (Trades, Portfolio) with 1.37% of outstanding shares, followed by Murray Stahl (Trades, Portfolio) with 0.9%, Bestinfond (Trades, Portfolio) with 0.57%, Simons with 0.22% and Wallace Weitz (Trades, Portfolio) with 0.07%.

Retail Properties of America Inc. Class A (RPAI) has a market cap of $2.59 billion; the stock is trading with a price-earnings ratio of 14.30 and a price-sales ratio of 5.41. The stock price has fallen 3% over the last 12 months and is currently 11.62% below its 52-week high and 10.89% above its 52-week low.

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GuruFocus gives the self-managed real estate investment trust, a profitability and growth rating of 6 out of 10. The return on equity of 9.66% and return on assets of 5.04% are outperforming 64% of companies in the Global REIT - Retail industry. Its financial strength is rated 4 out of 10. The cash-debt of 0.02 is below the industry median of 0.06.

Simons is the company's largest guru shareholder with 1.88% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.21%.

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

This article first appeared on GuruFocus.