3 Stocks With Low 12-Month and Forward PEG Ratios
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When screening the market for bargain opportunities, investors could be interested in the following three securities, as they appear to be underestimated by the market. Their trailing 12-month and forward price-earnings to growth ratios are not exceeding 1.5, a value that, as of June 18, approximately matches with the S&P 500's historical average value.
The PEG ratio is calculated as the price-earnings ratio without non-recurring items divided by the five-year Ebitda growth rate. The forward PEG ratio is calculated as the price-earnings ratio without NRI divided by the future earnings per share growth rate, which is a projection for the next five years.
Wall Street sell-side analysts have also issued optimistic recommendation ratings for these stocks, which means they have expectations for stocks whose share prices will improve over the coming months.
Marathon Digital Holdings
The first company that makes the cut is Marathon Digital Holdings Inc. (NASDAQ:MARA), a Las Vegas-based owner and operator of digital machines for the mining of cryptocurrencies and the creation of digital assets in the United States.
As of June 18, Marathon Digital Holdings has a share price of $28.92, a price-earnings ratio of 46.94, a past five-year Ebitda growth rate of 63.70% and an estimated future five-year earnings growth rate of 50%. Thus, the trailing 12-month PEG ratio is 0.74 and the forward PEG ratio is 0.94.
After the share price has increased incredibly over the past year by more than 25-fold, the market capitalization now stands at $2.88 billion and the 52-week range is 84.17 cents to $57.75.
GuruFocus assigned a score of 7 out of 10 for the company's financial strength and 1 out of 10 for its profitability.
On Wall Street as of June, the stock has a median recommendation rating of buy with an average target price of $48.50 per share.
Greif
The second company that qualifies is Greif(NYSE:GEF), a Delaware, Ohio-based producer and seller of industrial packaging products and services to companies worldwide.
As of June 18, Greif has a share price of $60.03, a price-earnings ratio of 15, a past five-year Ebitda growth rate of 19.30% and an estimated future five-year earnings growth rate of 10%. Thus, the trailing 12-month PEG ratio is 0.78 and the forward PEG ratio is 1.50.
Following an 80.43% increase over the past year, the market capitalization is $2.88 billion and the 52-week range is $31.14 to $66.02.
GuruFocus assigned a score of 4 out of 10 for the company's financial strength and 7 out of 10 for its profitability.
On Wall Street as of June, the stock has a median recommendation rating of overweight with an average target price of $69.80 per share.
Gray Television
The third company that meets the criteria is Gray Television Inc. (NYSE:GTN), an Atlanta-based television broadcasting company.
As of June 18, Gray Television has a share price of $22.3, a price-earnings ratio of 5.94, a past five-year Ebitda growth rate of 25.60% and an estimated future five-year earnings per share growth rate of 36.90%. Thus, the trailing 12-month PEG ratio is 0.23 and the forward PEG ratio is 0.16.
As a result of a 53.40% increase over the past year, the market capitalization is $2.13 billion and the 52-week range is $11.955 to $23.9443.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength rating and 8 out of 10 to its profitability.
On Wall Street as of June, the stock has a median recommendation rating of buy with an average target price of $28.71 per share.
This article first appeared on GuruFocus.
