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 $39.05 billion, Altaba Inc. (AABA) is trading with a price-earnings ratio of 2.61, a price-sales ratio of 2.82 and a forward price-earnings ratio of 117.65. According to the discounted cash flow calculator, the stock has a fair value of $268.4 while trading at $63. The stock price has fallen 10% over the last 12 months and is currently 23.21% below its 52-week high and 13.54% above its 52-week low.
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GuruFocus gives the closed-end management investment company a profitability and growth rating of 4 out of 10. The return on equity of 46.86% and return on assets of 32.77% are underperforming 74% of companies in the Global Asset Management industry. Its financial strength is rated 5 out of 10. The equity-asset ratio of 0.74 is below the industry median of 0.76.
The company's largest guru shareholder is Paul Singer (Trades, Portfolio) with 4.16% of outstanding shares, followed by First Pacific Advisors (Trades, Portfolio) with 1.13%, PRIMECAP Management (Trades, Portfolio) with 0.97% and Steven Romick (Trades, Portfolio) with 0.8%.
With a $877.04 billion market cap, Apple Inc. (AAPL) is trading with a price-earnings ratio of 14.87, a price-sales ratio of 3.34 and a forward price-earnings ratio of 13.53. According to the DCF calculator, the stock has a fair value of $338.2 while trading at $172.27. The stock price has risen 2% over the last 12 months and is currently 26.06% below its 52-week high and 14.91% above its 52-week low.
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GuruFocus gives the manufacturer of consumer electronic devices a profitability and growth rating of 8 out of 10. The return on equity of 47.76% and return on assets of 15.96% are outperforming 95% of companies in the Global Consumer Electronics industry. Its financial strength is rated 6 out of 10. The cash-debt ratio of 0.58 is below the industry median of 1.32.
Warren Buffett (Trades, Portfolio) is the company's largest shareholder among the gurus with 5.32% of outstanding shares, followed by Ken Fisher (Trades, Portfolio) with 0.26% and the Pioneer Investments (Trades, Portfolio) with 0.23%.
With a market cap of $10.29 billion, Alliance Data Systems Corp. (ADS) is trading with a price-earnings ratio of 11.02, a price-sales ratio of 1.33 and a forward price-earnings ratio of 7.60. According to the DCF calculator, the stock has a fair value of $387.16 while trading at $180. The stock price fell 21% over the last 12 months and is currently 33.56% below its 52-week high and 1.71% above its 52-week low.
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GuruFocus gives the provider of marketing, loyalty, and credit solutions, a profitability and growth rating of 10 out of 10. The return on equity of 48.15% and return on assets of 3.24% are outperforming 58% of companies in the Global Credit Services industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.27 is below the industry median of 8.43.
The company's largest shareholder among the gurus is Jeff Ubben (Trades, Portfolio) with 11.17% of outstanding shares, followed by Glenn Greenberg (Trades, Portfolio) with 3.18%, Jerome Dodson (Trades, Portfolio) with 0.45%, Ray Dalio (Trades, Portfolio) with 0.18% and Arnold Van Den Berg (Trades, Portfolio) with 0.17%.
Allstate Corp. (ALL) has a market cap of $29.76 billion; the stock is trading with a price-earnings ratio of 8.52, a price-sales ratio of 0.78 and a forward price-earnings ratio of 9.49. According to the DCF calculator, the stock has a fair value of $108.51 while trading at $84. The stock price fell 17% over the last 12 months and is currently 20.24% below its 52-week high and 0.83% above its 52-week low.
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GuruFocus gives the U.S. property-casualty insurer a profitability and growth rating of 4 out of 10. The return on equity of 15.85% and return on assets of 3.32% are outperforming 62% of companies in the Global Insurance - Property and Casualty industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.07 is below the industry median of 2.82.
Richard Pzena (Trades, Portfolio) is the company's largest guru shareholder with 0.18% of outstanding shares, followed by the Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.12%, Pioneer Investments (Trades, Portfolio) with 0.11%.
Assured Guaranty Ltd. (AGO) has a market cap of $4.22 billion. It is trading with a price-earnings ratio of 9.30 and a price-sales ratio of 4.28. According to the DCF calculator, the stock has a fair value of $46.02 while trading at about $40. The stock price has risen 13% over a 12-month period and is currently 8.72% below its 52-week high and 2.74% above its 52-week low.
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GuruFocus gives the financial guaranty insurance provider, a profitability and growth rating of 4 out of 10. The return on equity of 7.16% and return on assets of 3.42% are outperforming 65% of companies in the Global Insurance - Specialty industry. Its financial strength is rated 4 out of 10. The cash-debt ratio of 0.07 is below the industry median of 5.79.
The company's largest shareholder among the gurus is Kahn Brothers (Trades, Portfolio) with 1.17% of outstanding shares, followed by Arnold Schneider (Trades, Portfolio) with 0.76%, Chuck Royce (Trades, Portfolio) with 0.27%, Simons with 0.22% and Diamond Hill Capital (Trades, Portfolio) with 0.14%.
Allison Transmission Holdings Inc. (ALSN) has a market cap of $5.91 billion; the stock is trading with a price-earnings ratio of 9.0 and a price-sales ratio of 2.31. According to the DCF calculator, the stock has a fair value of $54.58 while trading at about $43. The stock price has risen 9% over the last 12 months and is currently 15.66% below its 52-week high and 21.20% above its 52-week low.
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GuruFocus gives the manufacturer of commercial-duty automatic transmission systems, a profitability and growth rating of 9 out of 10. The return on equity of 109.24% and return on assets of 16.69% are outperforming 94% of companies in the Global Auto Parts industry. Its financial strength is rated 5 out of 10. The cash-debt of 0.09 is below the industry median of 0.53.
Lou Simpson (Trades, Portfolio) is the company's largest guru shareholder with 6.69% of outstanding shares, followed by Simons' firm with 0.64% and Joel Greenblatt (Trades, Portfolio) with 0.34%.
Disclosure: I do not own any stocks mentioned in this article.
