The price-reserve ratio, which is the ratio of a company’s market cap to its net belongings, is 1 evaluate that investors can use to ascertain regardless of whether or not a inventory is relatively valued. In principle, it is what shareholders would get if the enterprise went bankrupt and its belongings were being liquidated, however in practice, factors such as intellectual residence and lack of purchasers for specified belongings can not be factored in.
However, compared with the price-earnings ratio, the price-reserve value is calculated even for the duration of intervals when a enterprise ordeals a net loss. So, corporations investing at their historical minimal price-reserve ratios can offer a excellent starting level for discovering eye-catching value prospects.
In accordance to the GuruFocus Historical Lower Value-Book screener, the adhering to corporations are investing at their historical minimal price-reserve ratios as of March 27. They also have substantial GuruFocus profitability and predictability rankings.
CVS Well being
CVS Well being Corp. (NYSE:CVS) is a U.S. retail well being care enterprise based mostly in Woonsocket, Rhode Island. It operates the CVS Pharmacy chain.
On March 27, shares of CVS traded close to $fifty eight.sixty for a market cap of $77.38 billion, a price-earnings ratio of eleven.fifty four and a price-reserve ratio of 1.two.
GuruFocus offers the enterprise a money strength score of four out of ten, a profitability score of 8 out of ten and a business predictability score of 5 out of 5 stars. The Peter Lynch chart suggests that the inventory is investing under its intrinsic value.
The enterprise has steadily grown the two income and net earnings about the years. Its operating margin of four.87% is common for the marketplace, but the return on cash of forty two.fifty six% is excellent.
Nordstrom Inc. (NYSE:JWN) is a century-previous U.S. luxury department shop chain based mostly in Seattle.
On March 27, shares of Nordstrom traded close to $16.01 apiece for a market cap of $two.sixty three billion, a price-earnings ratio of 5.32 and a price-reserve ratio of two.sixty eight.
GuruFocus offers the enterprise a money strength score of 5 out of ten, a profitability score of nine out of ten and a business predictability score of four.5 out of 5 stars. In accordance to the Peter Lynch chart, the inventory is undervalued.
Nordstrom’s operating margin of 5.06% is higher than the marketplace common. Profits and net earnings had now started to deal somewhat in fiscal 2019, inspite of 3-12 months development averages remaining strong.
AMC Networks Inc. (NASDAQ:AMCX) is a diversified media operator that owns several cable channels, as properly as a chain of theaters that bear its name.
On March 27, shares of AMC traded close to $24.83 for a market cap of $1.38 billion, a price-earnings ratio of three.seventy four and a price-reserve ratio of two.eleven.
GuruFocus offers the enterprise a money strength score of four out of ten, a profitability score of ten out of ten and a business predictability score of four.5 out of 5 stars. In accordance to the Peter Lynch chart, the inventory is investing under its intrinsic value.
The return on cash of fifty eight.04% and operating margin of 25.25% are bigger than seventy eight.forty seven% of competition. The 3-12 months income development fee of twelve.1% and 3-12 months Ebitda development fee of twelve.seven% also point out strong profitability.
Disclosure: Author owns no shares in any of the stocks pointed out. The point out of stocks in this write-up does not at any level constitute an investment decision suggestion. Buyers really should always carry out their own cautious exploration or consult registered investment decision advisors just before getting action in the inventory market.
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